The tariff wars are heating up between the U.S. and China, and if clothing ultimately gets caught in the crossfire, that’ll have a lot to do with the price of pants in America.
With new 10 percent tariffs taking effect Monday on China-originating goods like travel bags, leather clothing, woven fabrics and wool yarn used for things like sweaters—where China has particular expertise as a manufacturer—companies like Samsonite and Gap have already expressed plans to raise prices.
Gap CEO Art Peck told Bloomberg that the company is watching the trade changes carefully and that “in some cases, we’ll have no choice but to pass the impact of these tariffs through to our consumers.”
In a letter to the U.S. Trade Representative sent Sept. 6, Walmart warned the Trump administration that moving forward with the additional tariffs would impact a “significant” number of common consumer goods.
“The immediate impact will be to raise prices on consumers and tax American business and manufacturers,” Sarah F. Thorn, senior director for global government affairs at Walmart, wrote in the letter.
With the tariffs in effect, Walmart said its customers will face higher prices for things like backpacks, hats and car seats—and escalating these tariffs to 25 percent would pose a sizable burden to lower-income families that frequent its stores.
“Walmart and our suppliers will pay the cost of increased duties, which are simply taxes levied on products at the border. As a result, either consumers will pay more, suppliers will receive less, retail margins will be lower, or consumers will buy fewer products or forego purchases altogether,” Thorn wrote.
And despite the impending price hikes for America’s consumers, apparel organizations are either disappointed about the new, and potentially forthcoming tariffs, or disappointed that apparel hasn’t already been targeted.
In a statement following Trump’s announcement of the second set of tariffs on Chinese imports, this time targeting $200 billion worth of goods, the American Apparel & Footwear Association (AAFA) expressed its disappointment in the former, noting that its lobbying efforts against tariffs on apparel and textiles may have been in vain.
“During the public review process, AAFA and many of its members detailed the extreme damage this new tax will do to our industry, our nearly four million U.S. workers, and to every American family. It seems most of those pleas were ignored,” AAFA president and CEO Rick Helfenbein said.
Instead, he noted, President Trump’s additional tariffs show “a deep disregard for American business, American workers and American families, who will be negatively impacted by this decision. This is a very dangerous game to play, one that will not end with a winner.”
Sharing a similar sentiment, the United States Fashion Industry Association (USFIA) said the new tariffs will spell “considerable disruption” for supply chains.
“The fact that the tariffs will start at 10 percent now and will rise to 25 percent on January 1st creates additional chaos in the fashion industry’s supply chains, which will have a wide-ranging negative impact on consumers, companies, and jobs in the United States,” USFIA said in a statement. “These tariffs on imports of textiles, apparel and accessories do little to punish China for its intellectual property and technology transfer prices but do a lot to harm American fashion brands and retailers as well as consumers of their products.”
Trump’s latest list of tariffs did remove some textile items, like rayon fiber, some dyes and certain chemicals, which organizations like the National Council of Textile Organizations lobbied for the exclusion of as China was the only source of significant supply.
“Had U.S. textile manufacturers been forced to pay higher duties on the excluded items, it would raise costs for manufacturers making goods that must compete with like Chinese products,” NCTO president and CEO Auggie Tantillo said.
But for NCTO, adding tariffs to apparel would further improve conditions for the domestic sector.
“Adding tariffs on finished Chinese textiles home furnishings and apparel is the most effective sanction the United States could impose on China because like products from the NAFTA and CAFTA regions using U.S.-made textile inputs immediately become more competitive, thereby incentivizing the reshoring textile manufacturing jobs,” Tantillo said.
Whether that will happen remains to be seen, but Trump has made no secret of his preparedness to put tariffs on all items the U.S. brings in from China if China doesn’t fall in line with trade in a way Trump deems favorable enough for the U.S. That means another $267 billion in tariffs could be in the pipeline.
“It’s time to take a stand on China,” Trump said in a Fox News interview Thursday. “We have no choice. It’s been a long time. They’re hurting us.”