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The fashion industry is gearing back up to navigate Trump tariffs that could hit profits for the crucial spring and holiday shopping seasons.

“It’s impossible [to deal with], so we’re not dealing with it this time around,” said noted handbag and accessories designer Rebecca Minkoff to Yahoo Finance Executive Editor Brian Sozzi during an episode of the Opening Bid podcast (see the video above; listen below). “We dealt with it the last time tariffs were instituted. I think that year we thought we were going to make $3 million. We lost $3 million.”

Minkoff has had a robust career designing everything from handbag color pallets to supply chains. 

She is founder of the Female Founder Collective, as well as her namesake fashion company, and recently published a book called "Fearless: The New Rules for Unlocking Creativity, Courage, and Success."

Her fashion business is still rebounding from losses suffered during COVID-19, a time she estimates hampered the company's sales by 70%. Although she sold the company three years ago, she remains a “very happily paid employee.”

Watch: How Build-a-Bear's CEO is navigating Trump tariffs

Minkoff said she went to testify on behalf of the fashion industry during the first Trump administration. Those efforts didn’t help sway policymakers on tariffs, which can leave companies with a slew of matters to solve. 

“It was impossible with the timeline set forth to change [the] supply chain,” said Minkoff, who noted that fashion runs on a nine-month life cycle from concept to hitting the floor. 

To stay in business back then, Minkoff relocated operations out of China, a move that “saved us a lot of money in the long run, but it’s pain we didn’t need."

The company has been manufacturing out of Vietnam and Indonesia for the past three years, which has helped keep costs under control.

Tariffs have proven to be more than a buzzword for the consumer lately. 

Since Trump took office, he has announced a 25% tariff on Mexico and Canada, though goods under the United States-Mexico-Canada Agreement (USMCA) were exempt until April 2. In March, another 10% duty on Chinese goods was levied on top of the previous 10%. 

To put it into context, China's 2024 foreign textiles and apparel trade reached $322.4 billion, with $301.1 billion in exports and $21.27 billion in imports.

This is before Trump's so-called "Liberation Day" today, when he is expected to unwrap fresh tariffs on individual countries.

“We’re going to have to spend more on everything,” said Minkoff of the new tariffs. “Everything is going to be more expensive.” 

In fashion, one move to offset costs can be to adjust the quality of materials, such as zippers or buttons. “I think a lot of brands are going to do that, and it’s going to hurt them in the end,” said Minkoff. “It might be a quick fix for now, but the customer sees it.”

An outsider might think the easiest way to avoid tariff-based fees is to move operations back to the US full-time. But US-made goods will sport heftier price tags, Minkoff warns. 

Just the cost to make one T-shirt varies greatly by region based on rules and regulations. According to the website successfulfashiondesigner.com, one shirt made in New Jersey costs an average sample fee of $250 plus $7 for shipping, while the same shirt made in China costs $50 to make and $30 to ship.

Minkoff, who started designing out of a shop on 38th Street in New York City, has fielded this advice before. “I would love manufacturing to come back, but it has to come back on a scale that is not just the make,” she said.

Three times each week, Yahoo Finance Executive Editor Brian Sozzi fields insight-filled conversations and chats with the biggest names in business and markets on Opening Bid. You can find more episodes on our video hub or watch on your preferred streaming service.

Grace Williams is a writer for Yahoo Finance.

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