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The hidden $1.62 war tax now embedded in every garment you source

13 Mar '26

7 min read

The hidden $1.62 war tax now embedded in every garment you source

Pic: Shutterstock

Insights

The Hormuz crisis adds $*.**–$*.** to every garment from Asia, which is a *–* percent hit on $** basics but just *–* percent on $** items.
War risk insurance, carrier surcharges up to $*****/container, and surging bunker fuel stack into a de facto war tax on apparel.
Bangladesh and India face the sharpest blow as Gulf air hubs shut simultaneously.

This is not a geopolitics story. It is a commercial repricing event. Every apparel brand, textile manufacturer, and sourcing office that ships through or near the Persian Gulf is now operating under a fundamentally different cost structure—one built on three stacking surcharge layers that function as a de facto war tax on every garment moving from East to the West.

Layer * — War Risk Insurance. The London insurance market’s Joint War Committee expanded designated war-risk zones across the Persian Gulf. All major P&I clubs cancelled war risk cover effective midnight March *. New policies emerged at * per cent of vessel hull replacement value — up from *.** per cent pre-conflict, a fourfold increase. Some premiums surged over *,*** per cent. The crisis grew so acute that Washington launched a $** billion reinsurance programme through the Development Finance Corporation (DFC), with Chubb as lead underwriter, according to the DFC.