The future of that fading office staple — the tie — might just hang in the trade war balance.
And it’s an even crueler reality that the deciding vote on just how hard the future course of the formalwear icon will be belongs to President Trump, who is almost always dressed in suit and tie away from the golf course and once had a thriving branded tie business himself.
Fashion executives have been streaming to Washington, D.C., over the past two weeks to officially address the office of U.S. Trade Representative Robert Lighthizer ahead of Trump’s sit-down this week with China’s President Xi Jinping. Trump has set in motion the process to add a 25 percent tariff to Chinese-made apparel, shoes and more — the balance of imports that don’t already have such tariffs. That gives Trump more leverage going into the meeting, but if things don’t go well, the fashion industry will feel the pain.
On Tuesday, it was Mike Shaffer, PVH’s executive vice president, chief operating and financial officer, who made the case against raising tariffs.
Shaffer asked that ties, bow ties and cravats of silk, man-made fibers and other textile materials as well as swim goggles, which are key to Speedo’s business, be exempted from any duty increases, according to prepared testimony provided by the company.
Shaffer said over 95 percent of the world’s ties come from China.
“There is basically one city that exclusively supplies and manufactures ties not only for PVH, but also for a vast majority of the neckwear providers,” he said. “Although a seemingly simple sewing process, the use of silk and new soft hand man-made fibers requires significant skill.
“We note importantly that no silk apparel item has ever been subject to any U.S. restraints.…There is no U.S. silk worm industry. Or U.S. silk yarn spinning industry, or U.S. silk fabric industry and there is no neckwear industry in the United States. The shift over the past five years to more casual dress and working remotely caused a decline in annual production from 30 million ties in 2014 to 13 million ties in 2019.
“This tariff is the death knell for our tie business,” Shaffer said.
According to its annual report, the PVH Heritage division sells men’s dress shirts and neckwear under a number of brands, including Van Heusen, Izod, Arrow, Geoffrey Beene, Kenneth Cole New York, Kenneth Cole Reaction, Unlisted, a Kenneth Cole Production, Michael Michael Kors, Michael Kors Collection and DKNY.
Shaffer’s tie argument is an especially stark example of the case fashion has been making to Washington since Trump started ratcheting up tariffs on China, which the President contends is taking advantage of the U.S. on a number of fronts.
Apparel importers already pay tariffs of about 13 percent on average and they argue that higher costs at the border would force them to raise prices on consumers.
“Imposing additional tariffs on soft goods is punitive to the American consumer as the profit margins are in the single digits per product in some instances; tariffs are already high in most of this sector — and the impact would absolutely be passed on to consumers,” Shaffer said. “Further, duties on these products would not have any impact whatsoever on China’s acts, policies and practices regarding technology transfer, intellectual property and innovation. This industry is neither cutting-edge nor a priority sector for China in its 2025 development objectives.”
In earlier testimony on Monday, Columbia Sportswear Co. took its turn to try to persuade the Trump administration to hold off on boosting tariffs.
Katie Tangman, Columbia’s director of global customs and trade, testified: “In 2018, apparel and footwear imports accounted for 4 percent of all imports, but 30 percent of all duties paid.…Apparel and footwear importers pay, on average, double-digit import taxes for apparel and footwear products. For example, some of Columbia’s products are subject to import taxes as high as 37.5 percent. Adding a tariff of up to 25 percent on goods from China means that our import taxes would be as high as 62.5 percent, an untenable amount.”