The US-China Tariff War and Fashion’s IP Crisis: How it Exposed Fashion’s Secrets and Changed the Way We See Luxury

When the topic of discussion is global politics, people often picture oil, weapons, or technology, and not handbags, sneakers, or designer dresses. But this prejudice came to an end when the trade war between the United States and China showed just how connected fashion is to international conflict, as we all know what started as a tariff dispute quickly pulled the fashion industry into the spotlight, that started raising questions not just about money, but also about trust, intellectual property, and the very meaning of “luxury.”

The Background: How this Trade War Hit Fashion

The U.S.-China tariff war officially began in 2018 when Washington started placing steep tariffs on Chinese imports. The goal of increasing the tariffs was to punish China for alleged unfair trade practices and to push more American manufacturing. Since fashion is highly reliant on China, it quickly got caught in the middle of this war.

Clothes, shoes, and accessories made up a huge share of the tariff list. Some categories saw duties climb as high as 145 percent, making it much more expensive for U.S. brands to import goods from China. For an industry built on thin margins and fast-moving trends, these extra costs created real pain.

At the same time, the U.S. government tightened rules around what’s known as the de minimis exemption. Before, any package under $800 could enter the country duty-free. This was a loophole that fast-fashion platforms like Shein and Temu depended on. They shipped millions of tiny parcels straight to American shoppers without paying import taxes. Once that exemption was suspended for Chinese sellers, their business models came under real pressure.

China didn’t just stand by. Beijing hit back with its own tariffs on U.S. goods and rolled out an “unreliable entity” list, designed to blacklist or restrict foreign companies that it believed were acting against its interests. For American fashion brands trying to grow in the Chinese market, this created serious uncertainty. Suddenly, the supply chains that had seemed so stable for decades looked fragile and unpredictable.

China’s Unlikely Counterattack: TikTok Factories Go Viral

But tariffs were only the beginning. Something unexpected happened during this period: Chinese manufacturers themselves began speaking out. Instead of staying quiet as anonymous suppliers, many took to TikTok, pulling back the curtain on how luxury fashion really works.

Workers began posting videos showing that the same leggings Lululemon sold for $100 were being stitched in their workshops and could be purchased directly from them at a fraction of the price. Others revealed that bags nearly identical to Hermès’ famous Birkins were coming off their production lines. Almost all the luxury brands were exposed as being manufactured in China, such as Louis Vuitton, Gucci, Dior, Prada, Armani, etc. The implication was clear: why spend thousands on luxury when the so-called originals and the “dupes” often came from the same place?

These videos struck a chord because they broke one of fashion’s biggest illusions. Luxury brands have always sold more than just a product; they’ve sold a story. “Made in Italy” or “Made in France” on a label tells buyers that their handbag or dress is part of a long tradition of craftsmanship. But the reality is murkier. In many cases, raw materials are sourced in China, assembly begins in Chinese factories, and only the finishing touches are done in Europe. Legally, that allows companies to claim a European origin. Emotionally, though, it feels deceptive. TikTok videos made this hidden truth impossible to ignore.

The Impact on Intellectual Property

This new transparency posed a huge challenge for intellectual property (IP) rights in fashion. Traditionally, trademarks and brand names are powerful tools for luxury houses. They distinguish an original Chanel or Gucci from a knockoff. But when factory workers start advertising “same factory, same quality” products, the distinction between genuine and fake becomes blurred in the eyes of consumers.

Customs officers face the same problem. A counterfeit used to be easier to spot, a poorly made imitation with obvious differences. Now, with factories producing lookalikes that are nearly identical to the originals, distinguishing overruns, gray market goods, and true counterfeits is far more complicated. Enforcement becomes weaker, and the aura of exclusivity that trademarks protect starts to erode.

From a legal perspective, luxury brands continue to fight counterfeiting cases around the world, spending millions on enforcement. But from a cultural perspective, TikTok and social media have shifted the conversation. Younger shoppers don’t always see “dupes” as harmful; they see them as smart alternatives. To them, buying a $200 handbag that looks like a $4,000 Birkin isn’t theft; it’s empowerment. This change in mindset is arguably the bigger threat to IP than counterfeiting itself.

Changed Perspectives Toward Luxury

For decades, luxury was defined by scarcity and storytelling. Owning a designer bag isn’t just about its premium material; it is about the status and exclusivity that come with it. But the trade war, combined with social media exposure, has taken away the mystery and status it held.

TikTok, in particular, has democratized access to information. A teenager in Texas can watch a video of a factory worker in Guangzhou explaining how “luxury” leggings are sewn. This kind of transparency is harmful for brands as it makes it harder for the brands to maintain their aura of mystery.

This shift has also resulted in the broader cultural change, as many younger consumers today value transparency, sustainability, and fairness over status. Today’s generation doesn’t have any issue with buying “dupes” if the alternative feels like a scam to them. This generation is well aware of the fact that luxury houses have been exploiting consumers for years by inflating prices unnecessarily while hiding their reliance on cheap labour.

At the same time, there’s still demand for the prestige that comes with luxury. For some buyers, no TikTok video will replace the feeling of walking into a Chanel store. But the balance is shifting as, previously, consumers were not questioning the relevance of the high prices of the luxury brands, but today, they are skeptical about it. Nowadays, Luxury brands are no longer seen as untouchable; instead, they are being held accountable in ways they were never before.

What This Means for the Future

The US-China tariff war may have started as an economic clash, but for luxury fashion, it turned into a nightmare, i.e, a reckoning with authenticity. This clash has forced brands to confront questions about where their products really come from, how much of their pricing is justified, and how sustainable their business models are in the age of social media.

For luxury brands, the lesson is very clear, which is that protecting intellectual property is no longer just about going after counterfeiters. It is about rebuilding trust with consumers, which means greater transparency in supply chains, clearer labelling, and perhaps even rethinking the definition of luxury.

For China, the shift has been empowering and profitable. China has showcased its role as the backbone of global fashion, and it has challenged Western narratives that dismissed its contribution as mere “cheap labour.” Through TikTok and other platforms, Chinese manufacturers have rewritten part of the luxury story, plus they’ve gained direct access to global consumers in the process.

The war of tariffs may ease or escalate depending on politics, but the cultural shift it has triggered is likely to last much longer. Luxury, that was once untouchable, now stands exposed. The question is whether it can reinvent itself for a world where the truth is only one viral video away.

Final Thoughts

The fashion industry has always been about appearances. But the tariff war between the U.S. and China has pulled back the curtain and shown that behind the gloss and glamour lies a global network of factories, workers, and politics that is cruel and with unjustified high pricing. What consumers are going to do with this knowledge, whether they turn away from luxury, demand more transparency, or embrace the rise of “dupes,” will define the future of fashion.

One thing is certain i.e, the days when brands could control the story of where their products came from are over. In the digital age, the truth will always find its way out, and it may just change the meaning of luxury forever.

Author: Prashasti Bhati, in case of any queries please contact/write back to us via email to [email protected] or at IIPRD. 

References:

1. https://shenglufashion.com/2022/12/05/us-china-tariff-war-and-apparel-sourcing-a-four-year-review/?utm_source=chatgpt.com
2. https://www.voguebusiness.com/story/sustainability/as-tariffs-cause-chaos-across-fashions-supply-chain-what-happens-to-sustainability?utm_source=chatgpt.com
3. https://economictimes.indiatimes.com/news/international/global-trends/birkin-lululemon-and-tiktok-how-china-is-using-the-tariff-war-for-luxury-goods-to-go-direct-from-factory-to-your-feed/articleshow/120320075.cms?utm_source=chatgpt.com&from=mdr
4. https://nypost.com/2025/04/21/business/china-garment-factories-that-supply-shein-shut-down-amid-trump-tariffs/?utm_source=chatgpt.com