In the heart of southern India’s centuries-old textile industry, tens of millions of garment workers spin cotton fibers into yarn each year.
They then dye large swaths of that yarn a dusty indigo hue before weaving it into a denim fabric that will eventually be cut and sewn into your favorite pair of light-washed low-rise jeans. They’re the kind that fit in that particular way so that you too can look like a member of the girl group Katseye, decked out in Gap denim at a cost of $90 apiece. Made in India.
But after President Donald Trump’s 50 percent tariff on Indian goods went into effect this August, those $90 jeans effectively now have to pay a $45 toll just to get into the United States.
That is, if India — the world’s second-largest textile manufacturer — gets to make them at all.
The export-heavy factories once bustling across the country’s textile belt have all but come to a standstill since tariffs took hold. Garment workers have been rationing their shifts. And suicide rates are rising among the cotton farmers who supply the factories with raw materials — as a result, thousands of farmers have taken to the streets to protest their government’s tariff response.
Trump’s slate of double-digit export fees has battered global supply chains across a map that seems to be all but gerrymandered against the global poor. The tariffs aren’t just going to raise prices on your favorite Gap jeans, Nike shoes, or Costco Lululemon dupes — they are also poised to threaten decades of progress in countries where exports have collectively lifted hundreds of millions of people out of poverty in recent decades.
“Trump has basically blown up all of the rules of the game,” said Jayati Ghosh, a development economist and professor at the University of Massachusetts Amherst. Not that those rules were very fair to begin with, she said, but “having some rules is better than having no rules, where the big bully can come and beat you up in the playground.”
There are millions of people whose ability to feed their families and send their kids to school depends on the often meager wages they earn stuffing your Labubus or even assembling your Mercedes-Benz. And in places where global trade has been a major driver of economic growth, these tariffs could reverse decades of substantial but often fragile progress.
Made in India
For decades after gaining independence in 1947, India mostly kept to itself when it came to global trade. For much of the bell-bottomed jeans era, its exports hovered around just 5 percent of its GDP.
Then, in the early ’90s — the original age of baggy jeans and politically tinged celebrity denim ads — India hit a currency crisis that eventually led to short-term financial assistance from the Western-dominated International Monetary Fund (IMF) and the World Bank, which helped support a domestically-led opening of India to trade and foreign investment. The “free market” conditions that came with that help remain contentious: the IMF sees them as key to spurring economic growth — and by extension, swift debt repayment — even though they often hurt the country’s poorest, at least in the short term.
By the time jeans got skinny in the mid-2000s, companies like Gap had begun to see India as a promising manufacturing hub. In China, which dominated American clothing manufacturing at the time, wages were rising — meaning $4 to $8 per day. But in India, Gap’s subcontractors could pay workers, some of them children, closer to just $2 per day. That might seem miserly, but it’s worth noting that most low-skilled women workers in India at the time earned under $0.50 per day.
So, as exploitative as those garment industry wages could be, they also unlocked a lot of prosperity for the country and job opportunities for a mostly female workforce.
Over a decade, Indian exports ballooned — at an annual pace of 26 percent in 2006. Today, the country is one of the largest textile manufacturers (second only to China) and the second-largest single cotton producer in the world. Along the way, rates of extreme poverty in India — once home to one-third of the world’s poor — plummeted.
A child living in India today is nearly three times more likely to finish high school, over five times more likely to have basic plumbing, and 11 times less likely to die from hunger than just a few decades ago.
Most economists credit trade liberalization — and the economic growth it can bring — for propelling those changes.
“You can’t eat GDP, but you can enjoy a lot of the benefits of human development that come with higher incomes,” said Cullen Hendrix, an expert in development at the Peterson Institute for International Economics. That means “more kids making it to their fifth birthday,” and “more women being able to attend secondary school.”
When you buy a pair of jeans, the money that you spend trickles down the supply chain. The top of the chain — in this case, Gap shareholders — make the most money, but your cashier gets a cut too. Whatever’s left goes to the subcontractor to divvy among the Indian garment workers who stitched the pants. And the farmer who grew the cotton — the one trading in raw materials — earns the least of all.
But as brutal as the garment industry can be — women are often forced to work overtime in unsanitary conditions and many face harassment from their supervisors — it is still seen as the first rung in climbing up the ladder of the global supply chain and away from exporting raw materials like cotton or cobalt.
Today, 45 million textile workers live in India, where textile and apparel exports rose by about 7 percent to $21 billion in 2024. The country is now Gap’s second-largest manufacturing hub, with 88 factories in total, eight of them added between 2021 and 2024. Other major apparel brands like Zara, H&M, and Primark manufacture their clothing there, too.
But the 50 percent tariff from India’s largest trade partner — which is so high on tight-margin products like clothing that it is an effective embargo — has been a blow to this growing industry. Indian exports to the US plunged by a whopping 40 percent over the past four months. Gap recently told investors that the tariffs will cost the company up to $175 million, and it has already halted shipments from India.
That is a catastrophe for workers who are often paid per piece of clothing sewn.
Every lost order of blue jeans means less money for workers and “their children, their education, their health,” and even basics like food, shelter, and clean water, said Revathy Rugmini, regional director for Asia at the advocacy group Transform Trade.
“There are things that you can control and there are things that you can’t control,” Gap CEO Richard Dickson told CNBC in August. “The things that we can control, we’re doing really well.” The company did not respond to a request for comment from Vox.
Talks to reach a trade deal between India and the US are ongoing, but India’s garment industry is nevertheless bracing for an up to 10 percent drop in revenue this year as companies like Gap shift production elsewhere.
“Time is of the essence here,” said Rugmini, who noted that the poorest families — to whom export-driven gains have not been evenly distributed — could easily slip back into poverty if production remains slow.
Made in Vietnam
Three decades ago, more than half of Vietnam’s population lived on less than $3 per day.
But like India, the still officially communist country began to slowly liberalize its economy in the 1990s, culminating in a historic trade deal with the United States in 2001. The deal slashed US tariffs on Vietnam from a high of 40 percent to just 4 percent, opening the doors to a wave of foreign investment.
Enter Nike.
The shoe juggernaut was one of the earlier international companies to begin manufacturing in Vietnam in 1995. At the time, Bugs Bunny and basketball icon Michael Jordan Nike ads for the new Air Jordans were everywhere, sneaker sales were skyrocketing, and Nike suddenly needed a lot of new factories to make a lot of new shoes.
As a carrot for trade skeptics in Vietnam, the company promised to boost the portion of its shoes made in the country if the trade deal was approved. In 2000, Nike employed just 45,000 workers at five factories in Vietnam, but the company now makes over half of its shoes in Vietnam, employing nearly 450,000 workers at 135 independent factories.And as the number of companies manufacturing in Vietnam ballooned — and as workers got jobs, cities got factories, and Americans got sneakers — the level of extreme poverty in the country fell at one of the fastest rates the world has ever seen. Today, just over 1 in 100 people in Vietnam live in extreme poverty.
Along the way, foreign companies like Nike regularly came under fire for exposing garment workers to toxic fumes, restricting toilet access, and employing children as young as 14.
Still, even the sweatshops’ meager wages were often much higher than what workers could earn elsewhere. As exploitative as they could be, whenever a foreign factory moved in, incomes consistently rose and poverty fell.
But Vietnam’s explosive export-driven growth did have a catch. The country’s economy now revolves largely around the whims of foreign factory owners from Taiwan and Singapore, who subcontract for even further-flung global conglomerates like Nike.
“Foreigners play a huge role in Vietnamese production,” said Edmund Malesky, a professor at Duke specializing in economic development in Vietnam. “There’s a lot of positivity about what global integration has given Vietnam,” he says, but that dependence has also left them vulnerable.
“If you put all your eggs in this export basket, then you become critically dependent on your export markets,” said Ghosh.
In this case, Vietnam’s largest market is an increasingly protectionist United States. Trump’s threat to slap a 46 percent tariff on Vietnam in April sent Nike executives into a tailspin. The company’s stock nosedived more than 14 percent and Nike warned that its losses could add up to $1 billion, costs that the company would likely look to offset within its supply chain — namely, by lowering wages.
One messy trade deal rollout later, Trump eventually lowered tariffs on Vietnam to 20 percent, plus a vaguely defined 40 percent fee for the roughly one-third of Vietnamese exports that pass through China first. (Many export manufacturers shifted parts of their production line to Vietnam as a way to sidestep the steep tariffs Trump placed on China during his first administration.)
Nike stocks recovered somewhat, but what remains is still a very large tariff. Large enough that the United Nations just estimated the 20 percent blanket fee — compared with a pre-Trump tariff of less than 10 percent — could cost the nation up to $25 billion in lost exports to the US, a nearly 20 percent drop, which would make Vietnam the second-hardest-hit by tariffs in the world after China.
And if the 40 percent tariff is eventually applied on any so-called transshipments originating overseas, the impact could be even more dramatic. Huge swaths of Vietnam’s export manufacturing sector are intertwined with Chinese supply chains.
“We have a very expansive and diverse global supply chain that we’ve built over 50 years,” Nike CEO Elliott Hill recently told CNBC. “We’re working through some of the levers that we have to offset those tariffs,” including “working with our factory partners” overseas.
Vox reached out to Nike about the tariffs, and in response, the company emphasized its commitment to ethical labor practices and noted that it was actively exploring new options for sourcing its products.
Even with the reduced tariff, sneaker sales are already slipping. Vietnam’s all-important footwear exports to the US plunged by 27 percent in September, while textile exports dropped by 20 percent. The World Bank recently cut its GDP forecast for the country because of the tariffs, which could unravel decades of economic progress.
“The real lesson is that you really should not tether your entire economy to another one, even if it’s as big as the United States, because there’s simply too much unpredictability,” said Karen Mathiasen, an expert at the Center for Global Development. “One policy change in the United States has thrown the economy into turmoil.”
Made in Lesotho
Just before he slapped the tiny, landlocked African nation of Lesotho with the highest tariff in the world this April, Trump mocked the country as a place that “nobody has ever heard of.”
He must have never read the label on his own Trump-branded golf polos, some of which are manufactured by Lesotho’s fragile but vibrant garment industry.
And though the US eventually reduced Lesotho’s tariff to 15 percent, down from 50 percent in his initial declaration, the damage was already done in the textile sector, which employs around 30,000 people, most of them women earning less than roughly $40 per week.
Lesotho has been a poster child for the African Growth and Opportunity Act (AGOA), which allowed sub-Saharan African countries — which include some of the poorest nations in the world — to trade duty-free with the US for the past quarter-century.
The program, signed into law in 2000, aimed to recreate in Africa the same kind of export-driven growth that had begun to nudge countries like Vietnam into the global middle class.
Without export fees, cocoa farmers from Côte d’Ivoire could suddenly compete more easily to get their products into Hershey’s chocolate bars. Kenya’s vast fields of rose flowers could find their way into your Valentine’s Day bouquets. And Namibian cattle herders could ship Philadelphians their beef (for cheesesteaks, presumably).
But the biggest beneficiaries of AGOA were countries like Lesotho, Madagascar, and Ethiopia, where the program offered a way to break into the global fast-fashion market, and away from mining, farming, and extracting raw materials for export.
The idea was that African countries won’t grow if “we just continue to consume their oil and their diamonds and their cobalt and their food exports,” said Hendrix.
And few countries embraced the program as doggedly as Lesotho, which exported over $237 million worth of goods like golf polos, Levi’s jeans, and Walmart tees to the US last year.
But the fate of AGOA, which expired at the end of September, now seems bleak. Even if the US eventually revives the program, it’s unclear how new tariffs across the African continent would coexist with it.
The International Monetary Fund predicts that those tariffs will lower GDP across Africa. And they come at a time when foreign aid is also being slashed — a double whammy against development.
But, while the evisceration of aid has gotten most of the attention, experts say that tariffs could be significantly more destructive over the long term.
“The tariffs are going to be the big, big, shock to that system,” said Abhijit Banerjee, a Nobel Prize-winning economist for his work studying the contours of global poverty. “The US trade policy may well be much more damaging to the world than aid cuts.”
Of course, Trump can easily manufacture his polo shirts outside of Lesotho. At a recent visit to his store in midtown Manhattan, most Trump-branded clothing showed labels from Vietnam, Taiwan, and El Salvador.
Lesotho’s garment workers, though, have no such flexibility. The country went so far as to declare a state of disaster after the tariff took effect.
The textile industry in Lesotho was a pillar “that has been driving that country’s economy,” said Shimukunku Manchishi, senior policy officer at the African Future Policies Hub. The tariffs will stifle broader investment and development in a country where most adults only live into their late 50s and almost one-third of kids are so chronically hungry that they never fully grow.
Why? Because the US “doesn’t see Africa as a big trading partner that would have a ripple effect, a big economic shock, on the USA,” Manchishi said. More and more, African countries feel likewise, experts say, with most instead prioritizing their trading relationships with China, the European Union, and each other over an increasingly hostile US.
“They’re going to be looking less to the west — at least the far west, the United States,” Hendrix said. “And more towards the east.”
But for a nation like Lesotho, which had become a small manufacturing powerhouse for Levi’s jeans in recent years, it seems unlikely that denim will be the path to development anytime soon. Most African countries already trade more with China than they do with the US, but China’s still the world’s largest textile exporter — and it’s unlikely to become a big market for African-made garments anytime soon.
“This is a policy that is going to have adverse effects for some of the poorest people on Earth,” Hendrix said, “and provide limited, if any, benefit to the US economy.”
The post Fast fashion lifted some countries out of poverty. What happens when Americans stop buying? appeared first on Vox.
