After falling silent in 2021, this trade war has reignited with Trump’s second term and gained momentum at the start of 2025.
While markets remain uncertain, the radical changes in U.S. customs tariffs have captured the spotlight. Every company has tried to interpret the process based on their own customer portfolio. The good news is that the increased tariffs—which apply to all countries, including China—have been postponed for 90 days. However, the tariff rates on China remain quite volatile. Companies with ongoing orders and initiated projects are now in a better position to manage this temporary change thanks to the 90-day extension.
Producers with direct or indirect orders to the U.S., subcontractors, and companies operating a large part of their supply chain in countries with high tariff rates have managed to handle this pressure in a controlled manner. That said, this short-term postponement will eventually come to an end, and producers will have to face the new customs tariff brackets.
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American brands had already realized that the process could be somewhat flexible—even if temporarily—and thus did not create a “panic atmosphere” within their supply chains. It’s fair to say that companies focused on solution-oriented thinking handled this momentary stress more effectively, planning and executing their production without falling into panic.
With a population nearing 350 million, the United States is undeniably one of the most important markets for leather and leather goods. In this context, the changes in reciprocal tariff schedules between the U.S. and China have had a wide-ranging and unsettling impact on all intermediate suppliers.
This process, which began in late 2018 during Trump’s first presidential term, has started to escalate again during his second campaign. To better understand and comment on the current situation, it’s worth reviewing the changes that have occurred over the years.
In the table below, “Section 201,” “Section 232,” and “Section 301” refer to the respective parts of the U.S. Trade Law. Although the impact on the leather apparel and leathergoods sector began on September 24, 2018 under “Section 301,” the frequency of changes between 2018 and 2021 will allow you to form your own interpretation. For this reason, I found it useful to share the complete list.
After falling silent in 2021, this trade war has reignited with Trump’s second term and gained momentum at the start of 2025. The latest three changes below demonstrate just how radical this new phase is. This raises important questions: Where should we shift our focus during this period? How should we manage our investments and market diversification?
- May 12, 2025: The 145% customs duty imposed on goods produced in China and Hong Kong was temporarily reduced to 30% for a period of 90 days.
- May 1, 2025: The 0% customs duty on goods valued under $800 produced in China and Hong Kong was removed and raised to 145%. Even small sample packages are now included in this category.
- April 12, 2025: A 145% customs duty (calculated as 10% + 10% + 125%) was imposed on goods produced in China and Hong Kong.
While the table may present opportunities for some countries, the question remains as to how and what decisions Trump will make.
American companies, led by Apple, are accelerating their exit from China due to the increasing potential uncertainty.
The key point that separates other countries competing with China is capacity and quality.
There are countries that can show similar production capacities, but being able to ship the desired quality product within the required timeframe requires the realization of significant “know-how.”
Under these conditions, Turkey shows a minimum advantage of 15% over other countries. However, due to capacity utilization and production costs, it does not hold massive potential. Of course, if this 15% advantage is well-managed, it will encourage high value-added product and brand groups to manufacture in Turkey.
American companies are not particularly open to innovation. They tend to have centralized systems that are often cautious about risk-taking and research.
In this context, Turkish firms’ ability to better express themselves, highlighting the uncertainties that may arise in competing countries and emphasizing the solid 10% customs duty, will help Turkish firms stand out.
In this regard, export unions, policymakers, and the companies themselves have significant roles to play. If they can express themselves well enough, achieving positive results will be possible.
Are there countries looking to turn this process into an opportunity? A few examples include:
- The United Kingdom
- India
- South Korea
These countries are looking to eliminate reciprocal tariffs, join different policies, and secure their position as the trade war deepens.
A similar strategy can be applied specifically to Turkey. While high-capacity production might not be expected at this stage, Turkey can increase its share of higher value-added product groups. Unfortunately, this can only be realized through collaboration with the right teams, not just by waiting.
The trade wars seem likely to cause more harm. So, who will be the winners of this war? Let’s predict this together in our next article…