The Trump administration increased tariff barriers under the pretext of reviving the manufacturing industry, but the U.S. clothing industry is reportedly being driven to a production cliff.
On the 10th (local time), The New York Times (NYT) highlighted the reality faced by the U.S. clothing industry, citing multiple sources. It stated that local companies are unable to cope with high labor costs and are continuing overseas production, while raw material prices have skyrocketed, leading to an inevitable wave of local company bankruptcies.
The United States was once a representative manufacturing powerhouse that experienced a boom in the clothing industry, but it is currently sourcing almost all of its products from overseas, leading to a contraction of the industry. Today, only 2% of the clothing consumed in the U.S. is produced domestically, half of which is for military use. According to the U.S. Bureau of Labor Statistics, the number of employees in the clothing manufacturing sector dramatically decreased from 938,000 in 1990 to 84,000 in 2019.
Outlier, a premium clothing brand based in New York, is one of the companies hit hard by the recent tariff measures. It imports and uses high-quality fabrics such as linen and goose down from Europe and Asia. Tyler Clemens, co-founder of Outlier, noted that 'it would take at least 10 years to source (replacement) materials and supplies domestically' and added that 'price increases are likely to lead to a drop in sales, resulting in a freeze on new hires.'
However, moving the entire supply chain to the U.S. is nearly impossible. This is primarily due to the inability to absorb local labor costs. Hamilton Shirts, based in Houston, Texas, imports Italian fabrics to produce shirts in the U.S., but its main expenditure comes from labor costs.
A representative from Karen Kane, a women's clothing brand based in Los Angeles, explained that 'the U.S. cannot mass-produce embroidered or beaded clothing structurally' and noted that 'there are not enough personnel or infrastructure to handle complex and labor-intensive processes.' A representative from Todd Shelton, based in New Jersey, also stated that 'it will be difficult to see the effects of the policy unless tariff revenues are used to subsidize worker wages.'
The Trump administration, which changes policies as easily as flipping a palm, is also one of the factors preventing supply chain transfer. Abe Vermeister, co-CEO of Outlier, stated that 'tariffs could change even tomorrow, making it difficult to take special measures' and added that 'the uncertainty itself is the biggest risk.'
Experts argue that, in addition to tariffs, a sophisticated manufacturing revival policy encompassing labor cost subsidies and expanded public procurement is necessary. Steve Lamar, president of the American Apparel and Footwear Association, emphasized that 'President Trump insists only on tariffs, but what is truly needed is a better industrial promotion policy.'