The owner of the Uniqlo clothing brand, Japan’s Fast Retailing, announced on Thursday that it will hike prices to lessen the impact of rising US tariffs that would begin to seriously affect its US operations later this year.
The US and other key consumer markets have already seen a decline in the enthusiasm for shopping due to worries about surging inflation and an economic slowdown brought on by US President Donald Trump’s unpredictable tariff rollout. Trump announced a new deadline of August 1 for “reciprocal” tariff rates earlier this week, which will impact almost all trading partners.
Fast Retailing’s Chief Financial Officer, Takeshi Okazaki, stated during the company’s quarterly earnings conference that it is inevitable they will face a significant impact in the autumn and winter seasons.
The company acknowledged that absorbing all costs would be challenging. It stated that its strategy would involve raising prices where feasible, refraining from doing so where it isn’t, and ultimately prioritizing the creation of a sustainable, profit-generating business.
Most of the Uniqlo items that are sold in the United States are made in South and Southeast Asia. Trump informed Sri Lanka, a significant supplier of clothing to the United States, in a letter on Wednesday that a 30% tax will be applied starting on August 1. Trump stated last week that although its rival Vietnam is subject to a lesser 20% US tariff, transshipments from third countries via Vietnam will be subject to a 40% duty.
The business maintained its operational profit prediction for the current fiscal year, which ends in August, at US $ 3.7 billion since it anticipated a little impact from tariffs because of early exports to the US market.
The company stated in an earnings statement that the impact on FY 2025 is projected to be minimal, regardless of the tariff rate, and that it has already transported a significant volume of goods to the United States.
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