At the World Economic Forum today, U.S. President Donald Trump unveiled his plan to incentivize domestic manufacturing: tariffs on companies that fail to produce their goods in the U.S.
"Come make your product in America, and we will give you among the lowest taxes of any nation on Earth," the president said. "But if you don't make your product in America, which is your prerogative, then very simply, you will have to pay a tariff, differing amounts, but a tariff which will direct hundreds of billions of dollars, and even trillions of dollars into our Treasury to strengthen our economy and pay down debt."
This policy, positioned as both a financial strategy and a nationalist economic push, may force the fashion world to rethink its global supply chains. Some luxury brands have already taken steps in this direction. Louis Vuitton, for instance, opened a production facility in Alvarado, Texas, in 2019, during Trump's first term, marking the beginning of a collaboration between the Trump administration and the Arnault family.
However, this shift is likely to pose significant challenges for designers and brands heavily reliant on overseas manufacturing. Many fashion houses produce their designs and accessories abroad to capitalize on specialized craftsmanship or lower production costs, a dynamic that also plagued British designers during the uncertainty of Brexit. How the industry will adapt to these proposed tariffs remains to be seen.
Adding complexity to this policy landscape is Trump's ongoing hostility toward Diversity, Equity, Inclusion, and Accessibility (DEIA) initiatives. On Monday, Trump signed an executive order terminating all federal DEIA offices, roles, programs and mandates, dismantling in this way decades-old equity policies. The move has already led to the removal of equity plans from federal websites, including the White House's own, and DEIA federal employees have been placed on administrative leave.
A second order on Tuesday rescinded long-standing policies, including Bill Clinton's environmental justice directive for low-income and minority populations and an equal opportunity requirement for government contractors first signed by Lyndon B. Johnson during the civil rights era.
The fashion industry has been working to embed DEI (Diversity, Equity, Inclusion) principles into its identity, spurred largely by public backlash on social media to controversial campaigns and designs. Brands faced consumer boycotts over perceived cultural insensitivity or outright offensive imagery, leading to high-profile initiatives aimed at restoring trust and demonstrating accountability.
Consider Dolce & Gabbana's 2018 campaign for the Chinese market, which sparked outrage for its stereotypical portrayal of Chinese culture. Or Dior's "Sauvage" fragrance campaign, which, despite being developed in collaboration with Native American consultants, was criticized for its perceived insensitivity due to the fragrance's name, which translates to "savage."
In response to such controversies, major fashion houses began appointing DEI officers and forming advisory councils to guide their strategies. For instance, after backlash over its "Pradamalia" range, which included charms evoking blackface imagery, the Prada Group established its Diversity and Inclusion Advisory Council in 2019. This council featured prominent figures such as artist Theaster Gates and filmmaker Ava DuVernay, aiming to foster dialogue and education around inclusivity. Prada also brought on Malika Savell, former Director of Cultural Diversity Partnerships at LVMH, as its Chief Diversity, Equity, and Inclusion Officer for North America in 2020.
Similarly, Gucci faced severe criticism for its 2019 balaclava jumper with a cut-out mouth and red lips that summoned up blackface imagery. In response, the brand appointed Renée E. Tirado as its Global Head of Diversity, Equity, and Inclusion. Before joining Gucci, Tirado had developed and led DEI strategies at Major League Baseball (MLB). Under her leadership, Gucci launched a series of multicultural programs focusing on inclusivity and global exchange. Tirado worked in this position at Gucci for a year and, after she resigned, her responsibilities were shared by Chief People Officer Luca Bozzo (who left Gucci last December) and former model and activist Bethann Hardison.
These steps reflect a broader industry reckoning: diversity and equity have evolved from being PR tools to essential components of corporate strategy. However, Trump's recent actions highlight a genuine aversion for DEIA policies and raise questions about how the U.S. government's rollback of these policies will resonate in industries like fashion that are striving to embrace inclusivity.
In the fashion industry, progress often comes with a side of skepticism. The sector has a tendency to jump on trends with fervor, only to abandon them just as quickly: take the fleeting embrace of body diversity, which faltered as the Ozempic craze swept in. Conversations about diversity and inclusion in fashion peaked whenever a brand committed a faux pas in an advertising campaign or in a collection, but they often waned after a few weeks, while the problems persisted. That said the interest in these matters, helped some houses tracing potential roadmaps for creating lasting change. Additionally, university-level courses on overcoming bias and making better workplace decisions have become more common, reflecting a growing awareness and the possibilities of opening up new job opportunities in companies.
The U.S. has seen some significant progresses when it comes to diversity and inclusivity: the Council of Fashion Designers of America (CFDA) organized events with American clothing company PVH Corp. and also released reports on the State of Diversity, Equity & Inclusion in Fashion that focused on the experiences of Black employees and other underrepresented groups across all levels of the industry.
But the future of all these efforts faces uncertainty. With Trump's influence and growing resistance to DEIA initiatives among conservative groups, who often argue that such programs unfairly discriminate against white people and in particular against white men, there’s concern that companies might scale back or abolish these programs altogether.
Yet statistics repeatedly show that diverse management teams drive better business outcomes. Since 2015 strategy and management consulting firm McKinsey issued a series of reports on the issue of diversity to provide a comprehensive global perspective on the relationship between leadership diversity and company performance and always found that companies with strong DEI policies are more likely to outperform their industry peers financially. Which means that rolling back DEI initiatives in fashion companies could directly impact earnings as well. Therefore championing diversity is also a business imperative rather than just a box-ticking exercise.
For those looking to dig deeper, check out the Diversity, Equity, and Inclusion Lighthouses 2025 Report by the World Economic Forum's Centre for the New Economy and Society. The document (Download WEF_Diversity_Equity_and_Inclusion_Lighthouses_2025) offers valuable insights: the report builds on the work of the Diversity, Equity and Inclusion Lighthouse Programme and highlights impactful corporate strategies. Among the other companies they mention there is also LVMH, featured for its gender equity progress. According to the report, representation of women in key positions at LVMH grew from 23% to 48% since 2007; 65% of LVMH managers are now women. Besides, female CEOs increased from 0 to 17 since 2007 and women on the executive committee rose from 1 to 3 since 2007.
The report also highlights the 2025 goals for LVMH, that is "ensuring that 2% of its workforce consists of people with disabilities and attaining 30% representation of the Black, Indigenous, and people of colour (BIPOC) community in key positions in the United States."
But given the current political climate, will these plans withstand mounting pressure to scale back DEIA efforts? Only time will tell. The hope is that the fashion industry won't succumb to Trump's divisive trends. To ensure progress, we as consumers should remain vigilant and continue to demand accountability and advocate for diversity, equity, and inclusion programs. After all, the collective voice of consumers has the power to shape not just brands' values, but the future of the industry itself.
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