Americans could pay much more for clothes and footwear, if the new commercial rates proposed by the Trump administration will enter into force according to the plan, they warn more industrial groups. In the context of the new school year that will start in the fall, families in the United States could make more money out of pocket for children's outfit.
Nike produces in countries affected by Trump's rates. Photo: Shutterstock
According to the American Association for clothing and footwear, about 97% of clothes and shoes sold in the United States are imported, especially from Asian countries, reports News.ro.
Popular brands such as Walmart, Gap, Nike or Lululemon still produce most of the articles in regions such as Vietnam, Cambodia or Bangladesh – countries that now face high import rates.
Industry representatives warn that these rates will inevitably lead to price increases. For example, a pair of children's sports shoes, which currently costs $ 26, could reach $ 41, according to Footwear Distributors and Retailers of America. At the same time, running shoes made in Vietnam could climb from 155 to $ 220, and work boots in China from 77 to $ 115.
“If these rates will persist, they will eventually reach consumers,” said Steve Lamar, president of the American Association for Clothing and Shooting.
The American fashion industry has been based on foreign factories in recent decades to maintain low production costs, but new taxes affect both finished products and textile materials. Moreover, companies encounter difficulties in finding viable alternatives, because almost all major production markets have been targeted by rates.
Some large brands, such as Steve Madden, have already begun to significantly reduce their addiction to China, directing production to Cambodia, Vietnam, Mexico and Brazil. Other industry brands could better manage the situation, due to the negotiation power and the diversification of the sources of supply.
In contrast, companies with high exposure in Asia and limited influence in commercial relations, such as Gap Inc., American Eagle or Urban Outfitters, could feel the hardest impact, according to a recent analysis by Barclays.
