The global fashion industry is bracing for 2026, navigating a market defined by geopolitical instability, macroeconomic uncertainty, and, above all, unprecedented U.S. tariffs. As leaders pivot from focusing on “uncertainty” to acknowledging the environment is simply “challenging,” tariffs have emerged as the number one hurdle facing executives.
The severity of the trade landscape cannot be overstated, executives told McKinsey and the Business of Fashion for the 2026 edition of The State of Fashion report. U.S. tariffs on apparel and footwear imports, which had been around 13% earlier in 2025, dramatically spiked to 54% following initial government announcements in April. Although rates later eased, the weighted average tariff rate for apparel and footwear from the top 10 importers stood at 36% as of mid-October, well above historical norms. This sudden surge places the apparel and footwear industry among those most exposed to the tariffs’ profound impacts. Reflecting this critical situation, 76% of fashion executives surveyed believe responses to trade disruptions and tariffs will be the single most important factor shaping the industry in 2026.
For the 10th anniversary of the report, which began in 2016, McKinsey and Business of Fashion charted the many changes for the industry since 2016, from a generalized “age of volatility” to Asia’s undeniable rise to disruptions in how shoppers shop. For 2026, they chart major issues, including “tariff turbulence” and three emergent shopper appetites: a focus on resale, a sense of “well-being” in their purchases, and a future marked by artificial intelligence (AI).
