The debate over tariffs has focused on constitutionality, trade policy and political theater. But the more interesting story may be what happened at the cash register.
Even if tariffs are rolled back, consumer prices rarely move in reverse. Once higher price points are accepted by the market, they tend to stick. Consumers and the media may celebrate court rulings, but the retail price reset isn’t likely coming.
History supports this. After COVID supply shocks, prices rose. After freight costs spiked, prices rose. After energy shocks, prices rose. In almost every case, when the pressure eased, prices didn’t fully retreat. Markets recalibrated upward.
For apparel specifically, that may not be a bad thing.
Apparel prices have lagged behind broader inflation for years. In real terms, clothing has gotten cheaper relative to food, housing and services. My good friend Andrew Olah, founder of the Kingpins denim trade show, made this point in a 2024 op-ed that really stuck with me: In the early ’80s, a Wrangler jean sold for $13.99, while today you can find that same pair at Walmart for $19.97. Four decades later, denim has barely budged.
Meanwhile, he said a McDonald’s Big Mac cost 85 cents in 1983. Today, that same Big Mac is $5.89 in California — nearly 700% more. On that same trajectory is a Louis Vuitton Speedy 25 bag, which sold for $150 in 1979 and is $1,100 today.
Consumers clearly have no problem paying significantly more for food, luxury goods or really anything else they want. So it raises a fair question: why does apparel keep pushing prices down in the name of “creating demand?”
Tariffs, whether companies liked them or not, may just create the air cover to finally charge more for a category long stuck in promotional cycles and margin compression.
The data thus far suggests consumers have been tolerating tariff price hikes. The price increases that have shown up at retail haven’t meaningfully slowed shopping, particularly among higher-income consumers. In a K-shaped economy, the top tier continues to spend. The industry should seize that opportunity to segment intelligently and lean into the consumer who can absorb bigger price tags with premium product and novelty goods.
Whether you like tariffs or not, apparel may quietly come out ahead if operators use this moment to reset expectations and rebuild margin discipline.
Edward Hertzman is the founder of Hertzman Global Intelligence.
