Last minute holiday shoppers walk along a popular clothing district in Los Angeles on . Shoppers who are feeling good about the economy and spending more than expected on items like kitchen gadgets, toys and coats could make this the best holiday season in several years. Shoppers are spending at a pace not seen since the Great Recession, says Craig Johnson, president of retail consulting group Customer Growth PartnersHoliday Shopping, Los Angeles, USA - 24 Dec 2017

By going into a trade war with China, President Donald Trump is picking a fight with one of fashion’s best friends.

U.S. retailers sourced almost two and a half times as much apparel from China last year than Vietnam, its closest rival. The commanding lead illustrates just what’s at stake for the industry as Trump doubles down on the commercial conflict.

A look into government data showed the U.S. imported $27 billion worth of apparel from China last year, accounting for 34 percent of all apparel imports. That is more than was imported from any other country, dwarfing second-place Vietnam with $12 billion and third-place Bangladesh with $5 billion.

Additional figures from the American Apparel & Footwear Association showed that 72 percent of footwear and 84 percent of travels goods in the U.S. came from China last year.

Fashion, alongside most consumer goods, emerged unscathed last week when the White House slapped 25 percent tariffs on $50 billion worth of goods imported from China.

The duties were intended to punish China for unfair trade practices, but the country cried foul and said it would issue its own tariffs. The situation escalated Monday when Trump directed U.S. Trade Representative Robert Lighthizer to identify another $200 billion of Chinese imports that could be hit with higher tariffs if China made a move to retaliate.

On top of that, Trump added he would be ready to double that, pushing the potential total amount of imports that could be hit to $450 billion. If this materializes, it would be almost impossible for the fashion industry not to be impacted.

If fashion goods aren’t as lucky the second time and get hit with higher tariffs, the cost is expected to be passed on to consumers, who have been fairly sheltered from the trade war until now. They could in turn curb spending just at a time when things were starting looking up for retailers.

“This is going to be another factor that contributes to higher price inflation going forward,” said Frank Badillo, director of research for Macro Savvy, a market research and consulting company. “I definitely think this will affect consumer spending.”

He added that shoppers are already going to be affected indirectly by the first wave of tariffs, set to be implemented next month. As companies have to pay more at the border to bring in component parts for a plethora of highly sought-after products, the cost increases could eventually lead to higher prices at the tills.

Some experts have suggested that companies could counter this by moving supply chains to the likes of Vietnam and Indonesia, but that is easier said than done in such a short time frame.

David French, senior vice president of government relations at the National Retail Federation, said: “There won’t be any time for supply chains to relocate. That’s what our members are telling us. It takes years to move large sources of production from one country to another. The higher cost of tariffs will almost certainly be passed onto the consumer.”

Worries over China came as the U.S.’s trade row has also stepped up a gear with Europe. On Thursday, the European Commission unveiled higher duties on 2.8 billion euros worth of imports, including jewelry, fashion and beauty goods, in retaliation to U.S. steel and aluminum tariffs.

China’s Dominance in Apparel Imports

2017 U.S. Apparel Imports (in billions) Share of Import Market
World $80 100%
China $27 34%
Vietnam $12 14%
Bangladesh $5 6%
Indonesia $5 6%
India $4 5%
Mexico $4 4%
Honduras $2 3%
Cambodia $2 3%
El Salvador $2 2%
Sri Lanka $2 2%
Source: Commerce Department