A second chance: Thrift stores poised to win the post-tariff trade war

Before the latest round of tariffs, the fashion industry claimed it carried a disproportionate burden of trade-related duties. But Americans may be able to find relief by turning to bins of secondhand clothing.

The state of tariffs

An appeals court ruled President Donald Trump did not have the authority to impose his latest tariffs. The White House vowed to appeal the decision to the U.S. Supreme Court. But the tariffs will remain in place until at least Oct. 14 as the administration navigates the legal system.

The policy shift opens the door for the booming secondhand market, which is expected to reach $367 billion by 2029.

“We’re seeing tariffs change supply chains, and really shift prices,” Alon Rotem, chief strategy officer at the online thrift site ThredUp, told Straight Arrow News. “And so secondhand clothing has really been a great place to find value.”

Tariffs on apparel, footwear and textiles date back to the Smoot-Hawley Tariff Act of 1930, which increased levies on imported products by 20%. The American Apparel and Footwear Association (AAFA) said the industry accounts for 5% of imports by volume but has paid more than 25% of all tariffs on imports.

“All industries saw very, very high tariffs in 1930 when Smoot-Hawley passed,” AAFA President and CEO Steve Lamar told SAN.

In the decades that followed, many industries reduced their tariff burden.

“One of those big exceptions is for apparel, footwear and accessories, where we still largely pay the same high tariffs that existed back in 1930,” Lamar said. “As the rest of the economy saw liberalization, which meant that our overall tariff rate dropped to 1.52%, the average tariff rate on apparel, footwear and accessories still stayed up in that 11, 12, 13, 14 percentage range, depending upon which particular product grouping you’re looking at.”

The Budget Lab at Yale reported the effective tariff rate — the average duty paid on all imports — was about 11.5% in August. That figure is lower than the statutory rate, or rate established by law, which Yale reported reached 18.2% in August, the highest since 1935.

The Budget Lab estimates Americans in the short term will pay 39% more for leather products, 37% more for apparel and 21% more for textiles. After substitution and global supply shifts, those increases are projected to ease to 19%, 18% and 11%, respectively.

Closing a loophole

While the future of tariffs is uncertain, the Trump administration officially ended a trade exception that had allowed tens of billions of dollars in goods to enter the country duty-free each year.

The “de minimis” exemption allowed imports valued at less than $800 to enter the country without facing tariffs. That provision was eliminated at the end of August, a welcome change for resale leaders.

“We really think that is going to help level the playing field between domestic resale, like what we do at ThredUP, and fast fashion and really help comparatively improve domestic offerings,” Rotem told SAN.

Fast fashion — inexpensive, mass-produced clothing from brands such as Zara, H&M and Shein — benefited from the exemption. But the industry has faced criticism for environmental damage. United Nations Secretary-General António Guterres highlighted its impact during the International Day of Zero Waste.

“The price differential between what I could get at thrift stores in the ’90s and how much stuff costs even at Kmart was much bigger than it is between Shein and the Salvation Army today,” said Jennifer Le Zotte, an associate professor of history at the University of North Carolina Wilmington, in an interview with SAN.

The closure of the exemption is expected to make products from companies such as Shein and Temu more expensive.

Burgeoning resale market

Le Zotte, author of “From Goodwill to Grunge: A History of Secondhand Styles and Alternative Economies,” said mass production created the conditions for a secondhand clothing market. Before industrial improvements, stained or worn clothing was remade or repurposed.

“Places like Goodwill and Salvation Army rebranded that because in the 19th century, used clothing especially was really the province of peripatetic Jewish salespeople,” Le Zotte said. “So antisemitism discouraged other Americans from really exploring that avenue. But Salvation Army Christianized that and also sanitized it. They talked about, ‘We wash all these things. This is a great way to shop if you don’t have enough money.’”

Rotem said ThredUp has also worked to destigmatize shopping secondhand.

A 2024 YouGov survey found Americans are nearly split in their preference for buying secondhand versus new.

Thrifting as a hobby has existed since the early 1900s, but took off in the 1970s amid economic struggles and a culture shift. 

“In the 1970s, you see other economic downturns as part of the United States losing its global primacy in a lot of main sectors of production,” Le Zotte told SAN. “And here you definitely see people shopping secondhand out of necessity, but with a twin political purpose. Like saying, ‘I’m kind of mad at the government.’ There’s the context of the Vietnam War, too, so it’s rebellious and practical at the same time.”

In the wake of the latest tariff campaign, retail experts told SAN that resale could help domesticate the apparel and footwear industry.

“Three percent of what’s in your closet was made in the United States,” Lamar said. “Ninety-seven percent was made somewhere else and imported into the United States.”

Lamar noted that clothing produced abroad often includes American-made inputs such as yarn. Similarly, “Made in USA” goods may contain imported components.

But tariffs could add extra layers of American work to this international economy. 

“All of the clothing that we sell, while it was originally made predominantly overseas by the 50,000 different brands that show up on ThredUp, by the time that they’re sold and they’re sitting in Americans’ closets, put into a ThredUp cleanup bag and brought to our facility, we’re processing all of that in the United States,” Rotem said. “It’s come from the closets of Americans, and so we’ve effectively domesticated the supply chain for resale.”

Sneaker culture and resale

Thrift shopping may be one way to avoid rising prices, but tariffs could hit sneaker collectors especially hard.

“Obviously, the brands are running into issues from a tariff standpoint that require them to adjust certain elements of their business model,” Alan Vinogradov, co-founder of Sneaker Con, told SAN.

Sneaker Con, which Vinogradov described as a gathering of “like-minded individuals around sneaker culture,” hosts global events where collectors buy, sell and trade coveted shoes.

Brands including Nike and Adidas have warned that tariffs could push prices higher.

“What I’m mostly worried about, to be honest, is not only the cost but it’s what is going to be the consumer reaction in the market with all these price increases that I think will come not only in our sector, but in general in the U.S.,” Adidas CEO Bjorn Gulden told analysts in July.

Vinogradov expects sneaker enthusiasts to adapt by being more selective in what they buy.

“When it’s going to trickle down to the consumer, the shoes that they’re kind of set on buying are going to be shoes that they commit to,” he said.

He added that the sneaker resale market has softened in recent years as collecting has gone mainstream, with more frequent releases from Nike and new competition from other brands.

“So it’s not just Nike holding the fort, it’s other companies and brands lending to that,” Vinogradov said. “We’ve seen ASICS really dominate. We’ve seen New Balance really lend to that. There’s been a lot of different forces coming into the business that have truly impacted it.”

The post A second chance: Thrift stores poised to win the post-tariff trade war appeared first on Straight Arrow News.

Ella Rae Greene, Editor In Chief