Fashion emerged mostly unscathed after the first-volley of the U.S.-China trade war — even better than hoped — but the industry’s luck can only hold out for so long.
President Trump pulled the trigger on Friday, leveling 25 percent tariffs on $50 billion worth of Chinese imports.
But cut-and-sew and other apparel manufacturing equipment were spared additional duties, although the administration included such goods on an initial tariff list in early April.
Trade groups hailed that decision, which helps support any Made in the USA effort, but the main textile lobbyist, The National Council of Textile Organizations, continued to push for duties on Chinese-made fashions — an effort vehemently opposed by big brands and retailers.
China accounts for 42 percent of all apparel imports and companies say they can’t shift production away from the country quickly enough to compensate.
The office of U.S. Trade Representative Robert Lighthizer said the list of goods facing higher tariffs “does not include goods commonly purchased by American consumers” and focuses instead “on products from industrial sectors that contribute to or benefit from the ‘Made in China 2025’ industrial policy.”
But now that the fight is under way, there’s no telling where it will lead.
Trump said, “The United States will pursue additional tariffs if China engages in retaliatory measures, such as imposing new tariffs on United States goods, services, or agricultural products; raising non-tariff barriers; or taking punitive actions against American exporters or American companies operating in China.”
And China is responding.
“It is deeply regrettable that in disregard of the consensus between the two sides, the U.S. has demonstrated flip-flops and ignited a trade war,” said a spokesman for the Ministry of Commerce, according to the official Xinhau news service.
“We will immediately take tariff measures of the same scale and intensity,” the spokesman said. “All economic and trade outcomes of previous talks will now lose effect.”
Importers expect that apparel will eventually get hit with tariffs if the tit for tat continues and in the meantime worry that higher costs at the border, even on goods outside of fashion, will hurt consumers.
“Tariffs are taxes on American consumers, plain and simple,” said Matthew Shay, president and chief executive officer of the National Retail Federation. “These tariffs won’t reduce or eliminate China’s abusive trade practices, but they will strain the budgets of working families by raising consumer prices.”
And Rick Helfenbein, president and ceo of the Apparel & Footwear Association, called for the Republican-led Congress to get involved and a president from their own party.
“President Trump is fixated with tariffs, which he believes he can wield freely; but there are grave consequences to the use of tariffs,” Helfenbein said. “Congress needs to step in now to end this dangerous obsession. Tariffs are nothing but a hidden, regressive tax, plain and simple….We urge Congress to use its Article 1, Section 8 powers provided by the U.S. Constitution to regulate commerce with foreign nations.”