Since early 2025, the rules of the game have shifted. The United States raised duties on certain fashion imports from roughly 14 to 15 percent to above 30 percent within a year, marking one of the largest jumps on record. The impact was immediate. Retail clothing prices in U.S. stores rose by an estimated average of 17 percent. Shares of companies such as Nike and H&M declined. Brands began rethinking supply chains and sourcing routes. The scene is not entirely new. In 2019, during the tariff tensions between the U.S. and China, major brands faced a similar shock. Levi’s moved part of its production from China to Vietnam to mitigate added costs, showing how each tariff episode redraws the map of global manufacturing and sourcing.
In the European Union, duties on apparel and footwear can reach up to 17 percent depending on category and origin. Turkey, Morocco, and Tunisia benefit from preferential access under free trade agreements. This enables faster and more cost effective sourcing for European retailers and has supported the operating models of groups such as Zara and H&M. In 2024, France proposed a levy of 2 to 4 euros on each fast fashion parcel. The idea targeted platforms like Shein and Temu that flood the market with low priced goods, while favoring luxury groups that position around durability and sustainability.
Saudi Arabia: from 5 percent to up to 25 percent in 2020
Historically, customs tariffs in Saudi Arabia were set around 5 percent. In 2020, rates on many apparel and footwear items rose into the 10 to 25 percent range. Value added tax also increased to 15 percent. Despite these changes, fashion imports continued to expand, reaching 20 billion SAR in 2022 and then stabilizing near 19.9 billion SAR in 2024. Over the same period, efforts to localize and support Saudi brands increased.
What does this mean for a Saudi designer
Sourcing costs can rise if inputs come primarily from Asia. Global suppliers often reprice to offset tariff headwinds in their largest end markets. That repricing can flow through to non U.S. buyers via higher FOB quotes or shorter quote validity.
A local competitive advantage opens up. Imported products become more expensive as duties and logistics costs are embedded in retail prices. Locally produced pieces gain appeal when quality is competitive and delivery is faster.
Export planning must include landed costs. Pricing for U.S. or EU markets should assume tariff bands in the mid teens for many categories unless specific trade preferences apply. Ignoring duties can compress margins or erode price competitiveness.
Supplier diversification is critical. Overreliance on a single country or mill concentrates risk. Regional alternatives in MENA such as Jordan and Egypt can offer preferential access and shorter lead times, adding resilience to the chain.
And what about the Saudi consumer
Expect gradual price increases on some imported apparel as global brands pass through duty and logistics costs. Purchases from international platforms can become slower and more expensive when shipping routes face congestion or extra checks.
Saudi brands become more accessible and price competitive. The traditional price gap that favored imports narrows when duties and freight inflate shelf prices, especially in categories where local makers match quality and fit local preferences.
How fashion companies are adapting
It is no longer sufficient to rely on fastest possible sourcing alone. Brands are building larger safety stocks on key SKUs. They are diversifying tier one and tier two suppliers. They are investing in systems to track shipments and anticipate bottlenecks. Even the biggest players are adjusting. Shein opened distribution centers in Poland in 2022 and the UAE in 2023 to get closer to customers. Zara used air freight from India in 2024 despite higher costs and carbon impact to overcome port delays. These moves illustrate a wider pivot toward flexibility, proximity, and time to market.
Why this is an opportunity for Saudi Arabia
Tariff pressure on Asian supply has created burdens there but can translate into a relative advantage for production and logistics in and around the Kingdom. Saudi exports into certain destinations can face lower duties than comparable Asian shipments under specific schemes. Ongoing logistics projects such as the Integrated Zone in Riyadh, the Made in Saudi program, and the planned land bridge between the Red Sea and the Gulf increase the value of the Kingdom’s position at the crossroads of trade. Nearby partners such as Jordan and Egypt with preferential access can integrate into Saudi designers’ supply chains to add speed and optionality.
Practical checklist for Saudi designers
Pricing and landed cost: model duties by destination, VAT, insurance, and freight. Set target margins after all charges, not before.
Contracts and indexation: use shorter pricing windows with mills or include index based adjustments to manage volatility in yarn and duties.
Supplier map: maintain at least two qualified sources per key fabric and trim in different countries. Qualify a regional cut and sew partner for quick response capsules.
Inventory posture: hold buffer stock of critical fabrics and trims that have the longest replenishment. Use small batch test runs to validate demand before scaling.
Compliance and paperwork: prepare accurate HS codes, origin documentation, and care labels to avoid delays and re classification risks at customs.
For consumers and retailers
Consumers benefit when local brands offer seasonal drops with reliable fit and service. Shorter lead times and local returns offset some price inflation elsewhere.
Retailers can lean into buy now receive now promises with regional fulfillment. Faster delivery can be a decisive advantage when global lanes slow.
Tariffs can look like a burden in the short run. For those who read market signals with discipline and plan for flexibility, they become a ladder to climb higher. Designers who diversify sources, price with full landed costs, and tap regional strengths will turn a disruptive cycle into a competitive edge.
