Tariffs hit US textile industry hard

DW (English)

Trump’s import tariffs mean the US fashion industry will soon pay much more for materials from abroad - making it even less competitive against global rivals.

Transcript

00:01Joseph Ferreira runs one of the few American textile companies

00:05that still produces in the United States.

00:08He does not want to move his New York-based business

00:11to a country with lower wages.

00:14He has invested millions of dollars in this factory in recent years.

00:19The ongoing tariffs on imports to the U.S. are hurting his business.

00:24Things like fabric that we import from Italy are more expensive.

00:31Buttons from around the world are more expensive.

00:35Materials for us represent about 30% of our inputs.

00:4070% of our inputs are labor.

00:43He can barely save costs with his 115 employees,

00:47so he has to compensate for the additional costs from the tariffs elsewhere.

00:54We're going to share the pain.

00:56We're going to absorb the cost of higher materials internally as much as we can,

01:01but there will be some pass-through of our prices to our customers.

01:05Joseph Ferreira is unhappy about the U.S. government's volatile tariff policy.

01:10It is inconsistent, lowering and raising tariffs suddenly,

01:14as it has in the negotiations with China.

01:17And the ongoing agreement is only valid for three months.

01:21That's not enough for him to plan for his business.

01:25Is it 10%? Looks like.

01:27Is it 20%? I don't know.

01:29Is it 40%? We don't know.

01:31Is it 145%? We don't know.

01:33We need certainty, and we need it soon.

01:36The unpredictable trade policy is also disrupting the logistics sector.

01:40Imports grew during the first few months of this year before falling significantly.

01:45That led to a sharp rise and drop in freight volumes and prices.

01:50So logistics is unpredictable too.

01:53In anticipation of Trump's tariffs, many businesses try to raise their imports

02:06and stockpile their inventory, their warehouse as much as possible,

02:12and evidences, the import reports.

02:16That was the case for Galia Gundelova's business.

02:20The Bulgarian, who moved to New York over 20 years ago,

02:23sells clothes made in Bulgaria.

02:25Right now my fall collection, usually I ship in August,

02:31but now I'm trying to rush everything and ship in June

02:35to fit into this 90-day window where we still have the old tariffs.

02:41Many Americans would like to see more people employed in the textile industry.

02:46But it's not the kind of work most will be lining up to do,

02:49according to the libertarian Cato Institute.

02:52There is already a shortage of hundreds of thousands of skilled workers

02:55in the U.S. textile industry,

02:57and higher tariffs alone won't raise domestic production.

03:01Americans consider prices when shopping,

03:03and they're quick to complain about inflation.

03:06That's why clothing store owners believe that they will continue to import most of their stock.

03:10It's going to take many, many years to kind of ramp up an entire industry here.

03:17So in the short term, we're going to suffer.

03:19Our customers are going to suffer.

03:20Our brands are going to suffer.

03:22And everyone is just trying to make the best of it.

03:27Joseph Ferreira, too, doesn't see the government creating the right incentives

03:32to invest in the United States.

03:39Lower the tariffs on machinery and equipment.

03:43The apparel industry is behind.

03:45We haven't invested in our industry in 35 years.

03:48Other countries have.

03:49They have advanced equipment and machinery that we need to buy and bring into this country.

03:54Trump's economic policy has unsettled the U.S. textile industry.

03:59And businesses are now taking a wait-and-see approach.

04:03If we need to get an industrial industry, we need to be able to make the credit for our business and to have a business.

04:08And so we've dug into this place and we're going to help to manage the budget.

04:13We've got to pay our money.

04:15And so we've got to pay our energy,

04:18We've got to pay our money.

04:19We've got to pay our money.

04:20Let's pay our money.

04:22Let's pay our capital.

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