New U.S. tariffs imposed on imports from India are directly impacting garment manufacturers that supply companies like Gap. Indian textile makers, including Pearl Global, a client of Gap, are receiving demands to either share the tariff burden or move production out of India.
Pearl Global, for instance, has offered to shift production to its factories in Bangladesh, Indonesia, Vietnam, and Guatemala to bypass the steep 35% U.S. levies on Indian imports. This situation highlights the pressure on Gap's supply chain to adapt to changing trade policies.
The tariffs on Indian garments could lead to increased sourcing costs for Gap if suppliers are unable to fully mitigate the impact or if production shifts incur additional expenses. This presents a material headwind for the company's operational costs and profitability.
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