The basic blue jean may become entangled in a trade war between the U.S. and its allies. Following the start of U.S. duties on imported metals from EU, Mexico and Canada, denim brands expressed their concern that tariffs will be placed on goods like jeans and consequently could raise the prices for consumers worldwide.
President Trump issued orders on Thursday that imposed a 25 percent tariff on steel imports and a 10 percent tariff on aluminum imports from the European Union (EU), Canada and Mexico, ending a two-month exemption. In a press conference, German Chancellor Angela Merkel said the EU would respond in a “firm and united” manner to the tariffs.
Bloomberg reported that Levi’s called for “open markets and free trade where everyone plays by the rules.” In an email statement, the brand wrote, “Unilateral tariff impositions risk retaliation and destabilizing the global economy, in which case American brands, workers and consumers will ultimately suffer.”
Levi Strauss & Co. said it would work with industry peers to raise awareness of how the tariffs will affect their business, consumers and the people across their supply chains.
The tariffs are “one more thing to lose sleep on in this industry,” Abercrombie & Fitch CEO Fran Horowitz told Bloomberg. The brand has been taking steps to reduce its dependence on China and increase the agility of its supply chain. The turnaround appears to be taking effect. On Friday, the retailer reported net sales for the first quarter were up 11 percent to $730.9 million, with comparable sales ahead 5 percent.
Rick Helfenbein, president and CEO of the American Apparel & Footwear Association, criticized the use of punitive tariffs by the Trump administration. Canada, the EU and Mexico are the three largest markets for exports of Made in USA apparel, AAFA noted.
“Let’s be clear, Made in USA apparel and footwear will suffer as a direct result of this action by the Trump administration,” Helfenbein said. “Not only will this move result in inflationary costs, but we risk retaliation by our trading partners. In particular, the EU has already indicated that it will impose tariffs on American-made blue jeans, T-shirts and footwear. The ability to export our Made in USA product is essential for the health of the domestic manufacturing industry. This will be detrimental for our companies and for American workers.”
He continued, “Just as the administration was downgrading the storm from a ‘trade war’ to a ‘trade dispute,’ it has decided to take a very negative turn. It is important to note that tariffs are a hidden tax on the American consumer. They will inflate prices throughout the economy and hurt American job growth. New barriers will not create new opportunities for Americans.”