The American fashion industry has had lots to celebrate in recent months. We announced 11 winners of Fashion Manufacturing Initiative (FMI) grants to support manufacturing in the United States. On the heels of the fall collections in February, designers just revealed their new menswear collections and some have been preparing for swimwear shows. And on Monday, we celebrated the bright future of the industry by honoring the most innovative designers in America.
But while we bask in the glow of the industry’s achievements, we can’t ignore the biggest threat right now: the trade war. The Trump Administration is poised to hike tariffs on all imports from China and Mexico, two of the most important countries for fashion supply chains and global consumer markets—a move that will do nothing to solve the trade challenges American designers face, while inhibiting investment and growth in our industry.
The Council of Fashion Designers of America (CFDA), representing nearly 500 of the country’s most innovative womenswear, menswear, jewelry, and accessories designers, is alarmed about the proposed retaliatory tariffs. We know, perhaps more than any other industry, the importance of protecting our intellectual property—but we also know raising tariffs is not the solution. We strongly oppose the tariffs and urge the Administration to end the trade war if they want to support the ingenuity and growth of the American fashion sector.
China supplies around 41 percent of apparel and 72 percent of shoes sold in the United States, according to the American Apparel and Footwear Association (AAFA), the public policy and political voice of the industry and our strategic partner in Washington, D.C. These imports already have high tariffs—in some cases, as high as 32 percent for clothes and 67 percent for footwear.
While the Administration has imposed retaliatory tariffs of 10-25 percent on around $250 billion in imports from China, the fashion industry was largely in the clear—until now. In May, President Trump ordered the Administration to begin the process of raising tariffs on all remaining imports from China—which, of course, includes apparel, footwear, , and accessories not already hit by the earlier lists.
Meanwhile, on May 30, President Trump announced new tariffs on all imports from Mexico, which are scheduled to start at 5 percent on June 10 and increase 5 percent each month, up to 25 percent. It’s unclear how products currently covered by the North American Free Trade Agreement (NAFTA), which is used by many American fashion brands, will be affected by these new tariffs. (Mexico is the #8 supplier of apparel and #7 supplier of shoes to the United States.) Of course, the President has also proposed or actually raised tariffs on selected fashion items from India, Turkey, and Europe.
While companies do manufacture in other countries (including the United States), China is often the most experienced, most technologically advanced, most cost effective, or only manufacturer of some products—and many CFDA members rely on China to deliver for their customers.
Who will pay? Not China, as President Trump has suggested. When facing higher tariffs, American companies have two options: (1) eat the cost increases, limiting their ability to invest in new facilities, marketing, or employees, or (2) pass them on to customers. As explained in a recent letter to President Trump signed by organizations representing businesses and workers (including the CFDA), American consumers have paid an additional $21 billion as a result of the tariffs—over $1,500 every second. And these numbers don’t include the impact of China’s retaliatory tariffs on American exports, or the impact on the fashion industry, since our products haven’t seen a hike yet.
And if you think tariffs will support manufacturing in the United States, think again. The CFDA has worked hard to nurture manufacturing in the United States, including in New York. However, many American manufacturers require inputs from China, such as fabric, zippers, or rivets. Some of these prices have already gone up, and tariffs will limit their ability to grow their businesses, too.
Tariffs won’t solve the IP challenges, either. In FY2017, 50 percent of the 34,000+ counterfeits seized by U.S. Customs & Border Protection were fashion products: clothing, shoes, accessories, watches, jewelry, handbags, wallets. And the majority come from China. Yet, tariffs do little to address our specific challenges like online marketplaces and bad-faith trademark registration, and the higher prices that result from tariffs may in fact cause the counterfeit market to grow.
The American fashion industry is one of the most powerful engines of ingenuity and economic growth in the United States, and indeed the world. And while nothing will stop our designers from creating and inspiring and growing, tariffs will stifle this engine, which requires inputs from around the globe.
The CFDA is amping up our engagement in Washington, D.C., working with our members, partners, and broad coalitions in the Nation’s Capital to do whatever it takes to fight the tariff increases—and ensure the continued ingenuity and growth of American fashion in the United States and around the world.
Steven Kolb is the President and Chief Executive Officer of the Council of Fashion Designers of America.
