For U.S. Apparel Manufacturers, Chaotic Tariff Policy Isn’t Much Help

On the 15th open floor of a mezzanine building in Midtown Manhattan, about a dozen qualified workers make their way through piles of pants, cooking each piece together with focus and precision. Some of the articles are designed by OutlierA fashion brand that produces its smaller runs and experimental products with the ecosystem of producers of contracts from the Garment district.

It is the type of work that should obtain a push from the rigid rates just imposed on products that enter the United States from almost all other countries. But the warehouse in which Outlier maintains his fabric tells a more complicated story.

The rolls of fabric and recycled goose boxes come from Italy and Switzerland, Thailand and New Zealand, countries with specialized industries developed for generations that is unlikely to be recreated in America. Take the linen, made of linen grown in a coastal region that extends from northern France to the Netherlands.

“It would take a decade to grow a harvest,” said Tyler Clemens, outskirted co-founder. An Lino expedition was directed towards the cutting room; Clemens had just obtained the bill from the National Security Department with a “IEPA-Recrocal” labeled office, after the International Emergency Economic Powers Act, one of the laws used to justify the tariff measures of President Trump.

Those withdrawals will probably force the outlier to increase prices on its American manufacturing garments. The increase will not be as much as the relaunch on larger shots of finished clothing that the company matters from Portugal. But it is likely that prices on an already premium product will decrease orders, especially because consumers have to do with an increase in costs for everything else. In the meantime, Outlier has passed the intake, uncertain about what awaits us.

And move more production in the United States? This would mean finding and training more people willing to spend long hours in a sewing machine, most of whom are currently immigrants who have learned trade in clothing factories in China and central America. It could also mean machinery for the purchase that automatically cuts the tissue. This type of investment requires a certain trust that the duties will be around for a while.

“If we know that these rates are blocked, they will suck and make everything more expensive, but we can face it at a certain level,” said Abe Burmeister, commercial partner of Mr. Clemens. “But at this moment, it could change tomorrow. That level of chaos makes it more difficult to do business.”

The skepticism of Mr. Burmeister, dubbed on Monday, was deserved. Last Wednesday, the announcement of Mr. Trump on pause mutual rates blew up a hole in case to eradicate the supply chains abroad and wrap them in the United States. Yet, the remaining universal rates of 10 % will make imported clothing even more expensive, without doing a lot to help the tiny industry that makes them here.

Clothing is the paradigmatic example of a product that once the United States have produced in large quantities and has almost completely lost the rest of the world.

Only 2 percent of the clothing that Americans buy is cut and sewn at national level. About half is made for the military, which is required by law to use US producers. The manufacturing industry of clothing it takes 84,000 peopleFalling compared to 938,000 in 1990, according to the work statistics office; Includes 6,619 factories, decreasing compared to 15,622 in 2001.

This is partly the reason why the new rates of Mr. Trump – which are added to the existing duties on clothing, On average 12.6 percent – He will hit Americans’ clothing budgets hard.

Most of the US clothing manufacturers focus on specialized and high value products aimed at consumers willing to pay substantially more than the typical price of an item produced abroad. One of these companies are Hamilton Shirts, based in Houston, who has made usure for men in America since 1883. Use mainly Italian fabric and dressed shirts start from $ 245.

The main cost of the company, however, is his staff of 41 members. David Hamilton, his fourth generation co -owner, says that until foreign producers can pay workers only a few dollars per hour, the rates will not help much.

“We pay all livable wages, have access to a 401 (K) plan and health insurance and who knows what happens in factories in other countries,” said Hamilton. Best wishes that the Treaty that governs the trade in North America included a minimum salary for clothing workers, as it does for car workers.

Another entrepreneur of men’s clothing, Todd Shelton, proposed that the rates on imported clothing were used to support wage subsidies in the order of $ 8 per hour for workers in the production of US clothing. “This is the only way I see the rates that help us to produce clothing,” said Shelton, who produces a high -end clothing line Bringing his name to East Rutherford, NJ

The other strategy that US clothing producers pursue to keep costs low is limiting the range of offers. Karen Kane, a female clothing line based in Los Angeles, has long use of the city’s clothing factories. Those structures could manage the boom of the pandemic era in Loungewear, which is relatively easy to sew together. But Michael Kane, the president of the company, does not know where it can produce something with complex beads, embroidery or weaving, such as sweaters, in the United States on a commercial scale.

“We would like to do more here in the United States,” said Kane. “The challenge is to find a way to make it economically practicable.”

Some producers repress all their fabrics and other components at national level and some are isolated from the rates. This does not mean they are celebrating.

Over the past ten years, the most important evangelist of clothing built in the United States has been Bayard Winthrop, CEO of American Giant, who produces random staples of the cultivated cotton wardrobe, woven and sewn in the North Carolina. A partnership with Walmart He gave him the time, scale and certainty necessary to understand how to make a shirt that could in detail for $ 12.98. Think that the rates can play a similar role, if applied with judgment.

This is not the case that Mr. Trump used his vast power over commercial terms.

“He feels a little too chaotic and not very explained,” Winthrop said. “When you do things like that, create an environment in which both the capital markets and the participants in the supply chain freeze in uncertainty, and this can be really bad.”

There is a certain new production capacity. Joseph Ferrara was looking forward to high rates, having just moved his activity cut from the Manhattan clothing district to a larger structure in the queens with $ 25 million in renovations and new equipment. But he knows that the new orders depend on the designers who trust that production abroad will be more expensive for a long time.

“When I talk to my customers and colleagues in the sector, their first reaction is:” Is it really? Is this short -term? “, Said Ferrara.” If we get clarity that it is a target in motion and is fluid, I don’t think it’s a good signal to send. “

The most immediate risk for US manufacturing brands is that economic rotations push customers to retire and maintain their worn clothes or the vintage shop rather than buy again.

Joe Van Deman, a former product manager of Google, has purchased three clothing companies in recent years with manufacturing operations in the United States. One of them, the Vermont Flannel Company, still buys its cloth from Portugal; Van Deman is working with a North Carolina factory to produce nationally.

It is a more expensive flannel shirt than you can get from Eddie Bauer or LL Bean. Even if the rates increase the price of the foreign manufacturing shirt more than that of the United States, a nice T -shirt is still a discretionary purchase.

“If the rates cause the increase in the cost of raw materials, we will probably see consumers tightening the belts,” said Van Deman. “They will limit their expense to food and other needs and will be less likely to spend on clothing and gifts that could be considered less essential.”

At the same time, other policies could cultivate the home clothing production chain. For example, while the associations of the sector differ on the effectiveness of rates in helping national producers agree that the federal government could buy more than its goods from US suppliers. The Department of Defense is already required to do it from the era of World War Amendment of berriesBut the military purchase is dominated by prison work.

Steve Lamar is the president and CEO of the American Apparel and Footwear Association, which represents producers of national and global clothing. Do favors to get rid of prison work and strengthen the purchase requirements of American manufacture throughout the government.

“What are we doing to promote more manufacturing?” Signor Lamar asked. “We have better tools that would be much more effective in doing it. This president likes rates. What is the old Adagio – If all you have is a hammer, it looks like a nail.”