As we enter the holiday season, consumers will be faced with higher prices and reduced options, especially in men’s and women’s apparel.
For more than 29 years during my career I worked in both the retail and manufacturing of women’s ready-to-wear apparel. I served in various capacities, from being a buyer and divisional to a senior vice president, at a Milwaukee-based manufacturer of women’s apparel.
The impact of tariffs and the increase of ICE activity this year has reduced the number of undocumented workers in many industries, especially men’s and women’s ready-to-wear apparel. Many retailers rely on merchandise that is sewn and finished in factories outside the United States, especially the Far East and South America. These countries have been hit with tariffs on their raw materials and finished goods in order to level the playing field and reduce the influx of cheap merchandise. In addition, the increase of tariffs has contributed to backups at the ports of entry, which also slows the influx of this needed merchandise.
With the increase of ICE activity, many workers in the apparel industry have been either detained or deported. Unions that represent these workers have also been impacted by a reduction in membership and reduction in monthly dues. This results in less income for the unions, especially UNITE HERE, which represents workers in the men’s and women’s apparel industry. The ripple effect will be felt at the distribution level, with less trucking of finished goods to the distribution points, and at the retail level. Ultimately, the prices will be higher for the retailer and the increases passed on to the customer.
The goal of tariffs was to increase domestic production and opportunities for the American worker. Over the years, the number of jobs in the apparel industry have been reduced through the retirement of older, more skilled cutting and sewing machine operators. Traditionally, in the beginning of the 1900s, these jobs were filled with immigrants from Eastern European countries. This migration continued after World War II. In the ‘60s and ‘70s these immigrants came from Far East countries, including China, Vietnam, India and South Korea. A number of these countries were also hit with tariffs. So many of these raw materials, including piece goods, that originated from these countries were subject to tariffs.
Many local subcontractors who sewed samples and finished goods have also been affected. They will see a reduction in their volumes. The ripple effect will be felt across the entire industry. Finally at the retailer level, lower projected sales for the holiday season means lower holiday staffing levels. This will reduce the incomes of these American families and their ability to purchase seasonal merchandise.
What was intended to increase opportunities for the American worker and industries appears to be doing the opposite. Products will become more expensive, selections and product availability lessened, and prices increased to the American consumer. The pool of skilled workers reduced, many who are undocumented especially in the garment arena. In reality, the industry will have no choice but to look outside the United States for new sources of sewing finished goods. One example is that a number of American manufacturers and retailers are now sourcing finished goods from developing countries in Africa. The raw materials are sent directly to the contractor in Africa from the Far East and the United States and then the finished goods are shipped back to the United States for sale.
Yes, there are industries in America that should be protected by applying tariffs on foreign products. But those tariffs should be selective and not generalized, so they do not impact industries whose jobs we want to protect and grow. “Made in America” will always stand for quality, but a tariff war will not increase our global market share; it could possibly reduce it as other countries can produce lower-priced substitutes. We need to revisit the application of these tariffs and their impact of specific industries.