Twenty-five US states have filed suit challenging tariffs imposed by the Trump administration, placing an estimated $7.2 billion in apparel trade flows at risk, per a Fibre2Fashion report.

The multi-state complaint targets duties that have altered landed-cost calculations across US apparel supply chains since 2025. US Customs and Border Protection collects the contested duties at the time of entry, with importers, brands, and retailers dividing the incidence based on incoterms and contract structure.

How exposed is US apparel sourcing?

Apparel remains among the most tariff-sensitive categories in the US import schedule.

The $7.2 billion figure cited by Fibre2Fashion represents apparel trade volumes caught in the contested duties, a subset of total US apparel imports that run into the tens of billions annually.

For sourcing and merchandising teams, the per-unit math is direct. Every additional percentage point of duty on a $20 FOB garment adds $2 to landed cost before any mitigation through preference programs, free trade agreements, or origin engineering.

At higher duty rates, the margin pressure becomes difficult to absorb without retail price increases or supplier renegotiation.

What legal grounds are at stake?

State attorneys general have increasingly used coordinated filings to contest executive tariff authority.

Such complaints typically assert that the administration exceeded statutory authority or that the underlying determinations did not meet legal thresholds under the cited statutes.

The plaintiffs are seeking relief ranging from injunctive halts on duty collection to potential refunds of tariffs already paid.

Refunds would flow back to importers of record rather than directly to brands, but contract terms between vendors, importers, and brand customers will determine who ultimately captures that value.

Who carries the duty burden?

Standard landed-cost terms place duty liability on the US importer of record.

Most brand sourcing agreements pass this through transparently on cost sheets, with vendors quoting FOB or Delivered Duty Paid terms that shift the incidence.

Duty-payment timing also matters. Importers fund duties at the port using working capital or duty-deferment programs.

A successful refund claim returns that cash, often with interest, but processing timelines at CBP can stretch into years, leaving capital locked during the dispute.

What changes operationally for sourcing teams?

Brands with diversified country-of-origin maps carry lower single-tariff exposure.

Re-sourcing from one origin to another, however, requires nine to 18 months of lead time for vendor qualification, social-compliance audits, and production sample approval.

In the interim, sourcing teams typically respond to tariff risk through three levers: shifting volumes within approved vendor bases, adjusting FOB pricing negotiations with existing suppliers, and modifying retail price points to recover margin.

Each lever carries trade-offs between margin, lead time, and consumer demand elasticity.

What milestones to watch?

The next procedural milestone is the court's scheduling order, which will indicate whether the case advances toward a preliminary injunction hearing on duty collection or moves directly to merits review.

An injunction would freeze duty collection on covered tariff lines during the litigation, immediately relieving cash-flow strain for active importers.

Without injunctive relief, importers must keep paying duties and file protests with CBP to preserve the right to later recovery.

Brands that fail to document their protest filings risk forfeiting any eventual refund regardless of how the underlying case resolves.

The lawsuit adds another variable to a 2025 sourcing environment already shaped by reciprocal tariff actions, de minimis policy changes, and intensified transshipment enforcement. Resolution timing, more than the eventual legal outcome, will shape sourcing and inventory decisions through the back half of the year.