Will Ethical Supply Chains Survive the Tariff Storm?
Recent geopolitical developments have highlighted the fragility of global supply chains, reminding companies in continuously evolving sectors like consumer goods and fashion that strong relationships with suppliers are one of the few stable sources of resilience. Maintaining these relationships through responsible purchasing (based on environmental and social considerations, not just cost and quality) is not only a moral value but also a strategic necessity.
The fashion industry is one of the sectors feeling the weight of tariffs, which are causing disruptions when the industry is already struggling to make progress toward its previously announced climate and sustainability goals. According to a 2025 benchmarking survey by the U.S. Fashion Industry Association, 100% of 25 leading apparel brands and retailers identify the current excessive protectionist measures and volatile trade relations as a major challenge, with more than half of survey participants citing uncertainty about policies, particularly retaliatory tariffs, as their main concern.
Instead of responding with short-term cost reductions, major consumer goods companies are implementing strategic investments to build resilience. For instance, retailers like Walmart and Target have front-loaded their inventory to absorb tariff shocks before the holiday season, while Apple has chartered flights to transport 1.5 million iPhones from India, a move made possible by increased production with one of its key suppliers.
These are not just logistical maneuvers; they reflect the importance of trust-based, responsive supply chain relationships. Responsible purchasing practices act as the glue that holds supply chains together in times of ambiguity and uncertainty. Reports from Gartner indicate that nearly half of large firms have renegotiated supplier contracts or altered sourcing strategies to manage tariff-related risks. Tools like supply chain finance are increasingly being used not just to request liquidity but also as temporary cushions against volatility. These trends reflect a growing consensus that resilient, transparent supply chains that align with values are key to avoiding major disruptions and maintaining competitiveness.
Unfortunately, the fashion sector lags in this context, scoring only 66 out of 100 on the 2025 Garment Industry Scorecard issued by the Cascale initiative for better purchasing, with annual declines in key responsible purchasing areas including cost negotiation, payment terms, and product development. This is concerning, especially as initial impacts can cascade when new tariffs or other external shocks occur. Often, renegotiating production costs becomes necessary, and in the absence of strong supplier relationships, production shifts might lead to increased delays, labor risks, and reputational exposure.
This trend is also worrying due to its climatic implications. The fashion industry, with its complex global supply chains, is particularly vulnerable to such cascading effects. The U.S. tariffs that went into effect on August 7 directly impact supply centers crucial to the industry’s carbon footprint. Cascale found that only 1,800 factories across nine countries account for more than 80% of carbon emissions measured from the apparel, textiles, and footwear industries. Among these nations, six—China, Bangladesh, Vietnam, India, Turkey, and Pakistan—have been directly affected by the new tariffs.
Shifting sourcing away from these centers may avoid tariff costs in the short term, but it could also disrupt ongoing efforts to reduce emissions from these primary sources. We saw this in 2018 when tariffs against China led to a significant increase in production in Vietnam. Given that brands typically require an average of 14 months to add new suppliers, such rapid shifts create a multiplying effect: labor violations, longer timelines, and quality issues. Without coordinated planning, they threaten to undermine both climate goals and labor conditions.
Although the fashion industry is valued at $3 trillion, its official presence at this year’s United Nations Climate Change Conference (COP30) is expected to be minimal. As in previous years, travel budgets are being cut and the number of teams significantly reduced as the industry shrinks in the face of market volatility. Unlike climate-focused gatherings such as New York Climate Week or London Climate Action Week, COP30 will place greater emphasis on adaptation financing, carbon pricing, and nature-based strategies rather than redrawing trade or sourcing lines.
Nevertheless, industry stakeholders should pay close attention to the global appetite for sustainable financing and investment. Brazil is using its presidency of COP30 to promote major initiatives like the $125 billion “Tropical Forests Forever Fund,” a blended finance vehicle designed to help close an annual $1.3 trillion gap in climate financing by 2035. Moreover, discussions around carbon pricing for international trade and value chains may have a more significant impact than any trade reforms in other industries.
In summary, COP30 may not provide immediate tariff relief, but it could redefine the game in the long run by linking sustainability goals, sourcing practices, and competitiveness factors through policy arms that lie outside the direct control of the fashion industry.
As trade-related costs continue to rise, industry leaders will need to rethink their approaches. Their business resilience will not come from diplomacy or presidential handshakes but from trust-based relationships, fair purchasing practices, and innovations that drive sustainability. Brands and retailers must not view tariffs solely as cost burdens but as stress tests for their partnerships with suppliers. Companies that lag in price-driven strategies risk undermining their ability to deliver quality, speed, and creativity to today’s conscious consumers.
In contrast, businesses inclined toward transparency and collaboration—sharing forecasts to ensure continuity, calming demand through load adjustments, and providing fairer payment terms—are likely to succeed in avoiding surges in labor violations and maintaining the market signals necessary for continued investment in decarbonization.
At a time when tariffs and climate-related shifts can change sourcing strategies overnight, resilient partnerships are more than operational tools. They serve as strategic differentiators, signaling accountability, stability, and ethical leadership to an increasing array of stakeholders considering long-term interests.
