It’s hard to keep track of what’s happening with tariffs these days, probably because it seems as if there’s been a new tariff-related strategy revealed every week.
For a few months, it seemed like President Donald Trump was bluffing on tariffs, but as of today, it looks like he’s serious, and the president’s decisions are transforming business decisions and trade around the world.Â
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He said he plans to raise tariffs on some of America’s biggest trade partners, including the European Union, Brazil, South Korea, Japan, Mexico, Vietnam, the UK, and Thailand.Â
If the tariffs go into effect on August 1 — the date the president announced — the average tariff rate will increase to 20.6%.Â
This is the highest rate since 1910 and is higher than the Smoot-Hawley tariffs, which worsened the Great Depression, according to the Yale Budget Lab July 14, 2025 report.
This is all happening as retailers plan for the looming 2025 holiday shopping season.
On its July 10, 2025, earnings call, Levi Strauss & Co. (LEVI)  revealed how the company plans to offset tariff-driven cost pressures.
Levi’s inventory ahead of the holidays
The company is “taking a hard look at productivity in our assortments,” strategically eliminating low-volume SKUs to streamline operations, Levi’s CFO Harmit Singh said on the earnings call.
Levi’s will reduce less-popular styles and colors, which will ensure tighter inventory and reduce the need for markdowns. A leaner product mix will reduce the need for steep holiday discounts, company leadership said.
CEO Michelle Gass emphasized the brand’s broader shift — from denim bottoms to a full head-to-toe lifestyle brand, highlighting strength in direct-to-consumer, Europe growth, and product expansion.
She also said the company is doing its part and “absorbing some of the costs” related to tariffs.
Levi’s SKUs reduction is about flexibility as much as pruning. Singh noted the company’s move to a “common assortment,” enabling faster product deployment across markets and greater agility in responding to changing demand patterns.
Related: Levi’s makes harsh decision on workers amid alarming retail trend
The company reported its 13th consecutive quarter of direct-to-consumer growth.
Levi’s second-quarter performance surpassed expectations, in part thanks to sales of wide-leg jeans for women, which have been trending for the last couple of years.
Revenue reached $1.45 billion (a 6% YoY rise), and the quarterly adjusted earnings of $0.22 per share outperformed Wall Street’s $0.13 estimate.
The momentum allowed the company to raise its fiscal-year guidance. It now anticipates 1–2% revenue growth and EPS in the $1.25–$1.30 range, up from prior forecasts of flat or slight declines.
Tariff pressures vs. holiday forecasts
Threatened tariffs make shipping costs a major concern. Levi’s estimates that the tariffs on one container of product could tack tens of thousands of dollars onto cost.
Levi’s is also diversifying its supply chain. The company sources heavily from Bangladesh, Cambodia, Indonesia, Egypt, Pakistan, and Sri Lanka, with China representing just about 1% of its U.S. imports.
Related: Another struggling mall retail chain closing more stores
This helps buffer against geopolitical tariffs and positions the company better in an uncertain trade landscape.
The market rewarded these moves. Following its quarterly results, Levi’s stock jumped over 7% in pre‑market and after‑hours trading.
Dana Telsey, a research analyst who covers retail, described the results as “impressive” during the Q&A portion of the call, citing the successful shift toward a direct‑to‑consumer model and streamlined offerings.
Levi’s move reflects a broader retail trend: more focused product lines. Levi’s is optimizing inventory toward consumer favorites — like those wide-leg jeans and nostalgic women’s styles, e.g., “jorts” and “quiet Western” looks.
The company is finding ways to minimize tariff impacts and keep in step with evolving fashion trends. This dual focus on efficiency and style gives Levi’s a competitive edge.
Related: Levi’s CEO has stern warning for customers
