The burgeoning St. Louis fashion industry is bracing for the impact of the latest tariffs on goods from China.
Handbags, backpacks, luggage, hats and baseball gloves are just a few of the thousands of products covered in the latest round of U.S. tariffs imposed on goods imported from China. The 10 percent tax went into effect Sept. 24 and it will increase to 25 percent on Jan. 1.
Experts say consumers should expect to see higher prices before the end of the year.
“Everyone is thinking about it and trying to plan, but it’s so hard to plan for,” said Mary Ruppert-Stroescu, an associate professor in the fashion program at Washington University.
Ruppert-Stroescu is also a clothing designer and mentor to many students who are aspiring fashion entrepreneurs in St. Louis. She said, large-scale manufacturers as well as small batch entrepreneurs depend on China’s massive fabric and garment industry.
“If we can’t get our textiles from China where will they come from,” she asked. “The quantity that we get from China really can’t be replaced from anywhere else.”
Lisa Hu is learning firsthand about the supply chain. She left a successful career in finance to found Lux & Nyx five months ago. Her brand of luxury/functional backpacks and handbags are manufactured in China.
“Right now we have a batch of inventory coming in and that 10 percent tariff will hit us,” Hu said.
She has decided to absorb the additional cost and not pass it on to consumers for now. But, she is preparing for January when the import tax jumps to 25 percent.
“We are in the midst of contemplating about bringing in more inventory this year for next year,” she said. “Those are things we have to think about and consider, and that’s part of running a business.”
Lux & Nyx chief strategy officer Caroline Fan shared concerns for the entire fashion industry.
“This level of instability is hard for us and big manufacturers,” she said. “This pain is going to hit everyone: workers and companies and consumers”
According to the American Apparel and Footwear Association, U.S. imports from China add up to the largest market share of the of the American fashion industry:
41% of all apparel
72% of all footwear
84% of all accessories come from China.
China’s low wages and high productivity have helped the country become a necessary link in global supply chains.
“We have a thriving apparel and footwear industry in America, just not on the labor side,” said Rick Helfenbein, president and CEO of the AAFA. “We have designers, marketers, and retailers, and the textile industry is doing well here. But, it’s very difficult to remove yourself from the China equation.”
Johnna Beckham, founder of Boost Apparel Group and Johnna Marie custom clothing for women, runs her business out of a factory space on south Vandeventer Avenue. Her seamstresses work on a wide variety of fashions for small batch customers who order from one to 1,000 examples of a design.
“Fortunately, for me, most of my sourcing is here in the U.S.,” she said.
She advises fashion entrepreneurs to always look for new sources for fabrics and manufacturing.
Yet Beckham admitted it is difficult to avoid Chinese products completely. She is concerned that fashion startups, not prepared for the impact of unexpected tariffs, will probably bear the biggest financial burden from the tariffs if they source supplies from China.
“We firmly believe that tariffs are a tax on the American people, pure and simple,” said Helfenbein at the industry trade association.
Helfenbein said his group lobbied hard against the tariffs which the office of the U.S. Trade Representative characterizes as part of a “continuing response to China’s theft of American intellectual property and forced transfer of American technology.”
“We are very very concerned about these tariffs,” Helfenbein said. “The president is threatening another $267 billion worth of tariffs which means just about everything coming in from China has a tax on it.”