US-China Tariff War During COVID-19—Discussion Questions from Students in FASH455

Steve Lamar, President & CEO, American Apparel and Footwear Association

#1 Studies show that the Section 301 punitive tariff on imports from China hurts both US fashion retailers and ordinary consumers. But why doesn’t President Biden announce to remove the tariffs and stop the trade war?

#2 It doesn’t seem the tariff war with China has brought more apparel manufacturing back to the US. Is this result expected or surprising? How does the outcome of the trade war support or challenge the trade theories we learned in the class (e.g., mercantilism, absolute advantage, comparative advantage, and factor proportion theories)?

#3 The U.S.-China tariff war continues during the pandemic, resulting in higher sourcing costs for US fashion brands and retailers, which have been struggling hard financially. In such a case, if you were the CEO of a leading US fashion brand, why or why not would you pass the tariff burden to consumers, i.e., ask consumers to pay a higher price?

#4 Why or why not do you think the tariff war with China has fundamentally shifted US fashion companies’ sourcing strategy?

#5 What’s your take on “tariff engineering” adopted by fashion companies? A smart idea? Loophole? Controversial? Need to be encouraged/discouraged? And Why?

#6 Any reflections on the video discussion (above) regarding the US apparel industry’s view on the impact of the tariff war during the pandemic?

(Welcome to our online discussion. For students in FASH455, please address at least two questions and mention the question number (#) in your reply)

Author: Sheng Lu

Professor @ University of Delaware

27 thoughts on “US-China Tariff War During COVID-19—Discussion Questions from Students in FASH455”

  1. #3 If I were the CEO of Macy’s I would not make consumers take the burden of the tariff because consumers do not want to pay higher prices for something that they know was cheaper before. With the rise of the cost of manufacturing and sourcing in China, especially, we would either have to keep prices the same and risk losing a great deal of profit, or raise prices and risk losing customers in order to keep our numbers up. Customers are loyal to a brand mainly because of the pricing. In the case that the burden of the tariff was passed on to customers, we would lose customers if we raised the price of things, and then customers would just go purchase items they need at competitors that offer better pricing. Macy’s as a company definitely has enough money to cover some of the tariff so maybe prices would only rise a little bit for certain items. Due to the circumstances of covid and the impact it has on Americans, CEO’s and other employees of brands like Macy’s are certainly facing some tough decisions within their companies and if I were the CEO specifically of Macy’s I would face the burden myself, so customers stay loyal.

    #4 I believe the tariff war between the US and China has jumpstarted the shift in fashion companies sourcing strategies for the United States. The impact of COVID-19 on mercantilism has increased the amount of imports the U.S is receiving from China fueled by the stay at home order that Americans are facing. Many Americans are shopping online and purchasing products that are at lower cost if imported instead of made in America. However, the tariffs on Chinese imports are affecting companies and forcing some to close many stores which in sense is not good for the economy. Because of this many U.S companies have shifted their sourcing to other countries such as Vietnam, Bangladesh, India, and Indonesia. These countries are the true winners of the US-China Trade war because many US companies are sourcing and moving distribution from China to other low cost exporters; allowing them to keep the prices down for operation costs and retail prices for consumers, avoid the extremely high tariffs on Chinese exports, and make more of a profit to grow!

    1. Great thoughts and comments! A few observations of mine:
      1) The rising sourcing cost is one of the major challenges facing US fashion companies. However, the cost pressure mostly comes from logistics and shipping, not the merchandise itself (https://www.bloomberg.com/news/articles/2021-02-26/u-s-retailers-see-millions-in-sales-delays-amid-shipping-logjam)
      2) It doesn’t seem that retailers are passing the rising cost to consumers yet—largely because apparel retail is such a highly competitive market. You can see the % of products sold at a discounted price and the discount rate (markdown%) in 2020 overall were similar to 2019. (https://coronavirus.edited.com/)
      3) However, it is also true that retailers are suffering financially: Macy’s suffered a net loss of $3.9 billion in 2020 due to the pandemic. That being said, to which extent the tariff war has contributed to Macy’s financial loss is very challenging to evaluate.
      In fact, I think retailers are more concerned about the uncertainty caused by the trade tensions, especially during the Trump administration.
      BTW, would be interested in hearing your thought on the video.

    2. Great points made! I definitely agree with your viewpoint. First, most customers are very price sensitive. If Macy’s were to increase their prices, consumers will notice and alternatively may go shop somewhere else. This could mean Macy’s losing business and customers which in the end could have a terrible affect. I also know from personal experience when my hair salon raised their prices to cover the cost of credit card fees, I was very unhappy about the change in prices for services. Companies need to be very cautious and strategic if they do raise prices. And to your second point, I do agree that the main winners have been countries that we have never or rarely do business in or with. The trade war has forced companies to go other places and this really has benefited those countries.

    3. You made some great points. Retail right now is being hit on so many sides at the moment, especially fashion retailers like Macy’s and JC Penney. The pandemic has forced them to eat massive losses in sales, while also paying their current workforce. As the prevalence of in-person social events has dropped, people have started to shift away from industries that support that. Right now, stores like Home Depot and Lowe’s have seen 20-30% profit in their margin as more people who would spend money on clothes and travel are now spending it on home projects and makeovers. Tech companies have seen massive profits. Things like toys, furniture, and home remodeling have been growing.

      Furthermore, people are buying things online at record rates. Amazon provides cheaper prices for just about anything because they do not need to have a brick-and-mortar store with salespeople to sell you goods. The foreign-made product is just an added advantage. Etsy, poshmark, and depop provide artists to sell work without needing a boutique on the main street. You are right in that people buy based on price, but another part of it is the quality. Amazon reviews help with that a lot – a bad review leads to a fall in sales. Having big fulfillment centers and machine learning algorithms that take your search history, the amount of time you look at stuff, and the reviews you spend time reading can help develop reliable customer bases that swear on the product (or create a shopping addiction). It has already killed mid-size department stores like the Bon-ton and Boscov’s, and it causing malls to close either entirely or lose their big department stores like Macy’s and Bloomingdale’s.

      Another killer for department stores has been it’s easier for a brand to set up shop at an outlet or strip mall than it is for them to be at Macy’s. Rather than pay a department store to sell their stuff, an outlet shop allows a brand to have total control in the presentation of the products. There is a distinct feel when someone goes to Calvin Klein store at the mall compared to the section for it at Macy’s. This is what is killing stores like Nordstrom, Lord & Taylor, Bloomingdale’s, Neiman Marcus, and Saks. A high-end company can create their own experience that makes them distinct and cater better to customers for their needs compared to a department store with multiple products.

      The tariffs are really here the final nail in the coffin. Biting the tariff is going to help them survive, but sadly it’s very, very difficult for these businesses to thrive later on if they do not improve their online service and their supply chain. With these market forces, Macy’s is already precarious. They are losing customers very quickly, as many shoppers will go to the physical store to see the product and then buy the thing online on Amazon. Macy’s could even lose their high-traffic stores in the center of cities and large towns if they don’t weather the storm right. An indicator of a store having trouble is when there is a massive clearance section in the store – a sign that they are not selling their stock that well. Amazon and Wal-mart have world-class distribution networks that have led to the demise of companies that were once thought too big to fail like Sears.

      Also, much of the shift away from china might be due to the fact that the wages for the average Chinese person have risen substantially in the past 20 years more than suppliers trying to find a way out of the trade war. The trade war may be the reason to do it now – as it indicates that the US is not going to be as friendly with the middle kingdom in the future as it used to. If the short term costs is not a large one, they will bite it until a new supply lane in Laos, India, or Vietnam is fully running. But the economics indicate that China will be in the same position as the US in the next 20 years. If the apparel manufacturers stay in china, overall costs of the goods will rise. Western and Chinese clothing companies know that it is bad for business and the government knows that it will cause inflation to rise and cause social unrest, so they need to move elsewhere to take advantage of that. South and Southeast Asia, and even East Africa now, are new places where this investment is happening. Apparel manufacturing needs low-cost wage workers to the job to be economically feasible at a large scale at the moment.

    4. Response to your answer for #3: I agree that raising the prices should be the last resort, since there are alternative strategies, such as tariff engineering and switching to airfreight. With Macy’s, I would consider how the pandemic affects our current sourcing and manufacturing routes plus lost and delayed goods. I would also consider how competing wholesalers – such as Nordstrom and Saks Off Fifth – modify their fashion vs. machinery (e.g., cookware) pricing structures.

      Response to your answer for #4: I think the tariff war perpetuates tension and trust issues between the US and China. Though we have little evidence of the US’ re-shoring, we see the US diversify its sources and pivot from China to less-developed countries (as you noted) for even cheaper labor and supplier costs. Here on, we can expect the Biden Admin. to hold China accountable through long-term pressure with the help of allies, as noted by AP News (article: https://apnews.com/article/joe-biden-donald-trump-technology-beijing-global-trade-22f525e41676d4e6abf96f3ca9255d15).

    5. Reply to #4: I think you made some really great points. I do think this tariff war shifted many U.S fashion companies sourcing strategy.

      I feel like whenever we discuss who the winners and losers are between this U.S. and China tariff war, we are always only thinking about U.S. and China. However, what about everyone else? And I am glad you brought this up! Other countries are winning due to this implication, such as Vietnam and Bangladesh. This makes me think of a previous discussion we had to look at for class about the fashion DHU students. They discussed how China is worried about their comparative advantage as many other developing countries are offering cheaper manufacturing costs than them. Because we now have more options, I am curious to see if President Joe Biden continues to view China as an important asset for our manufactured goods, or if he considers other countries as our new main manufacturing source.

  2. #2 – The result was quite expected. The US has a lot of land, relatively skilled and expensive labor, and a relatively high capital amount placed in banks and the government. The apparel industry needs relatively cheap and unskilled labor to be competitive. According to factor proportion theory, countries will make things that they have an abundance of, and since the US does not have a cheap labor force in the first place, it cannot efficiently make clothes in comparison to other countries. The trade war has only moved apparel manufacturing to Southeast Asia and the Indian subcontinent, which has a lot of cheap labor compared to China thanks to its rising incomes. The US may have an absolute advantage is most things, but compared to other things, they are not that efficient in making clothes compared to fabric.

    #3 – As a fashion brand, I would not pass on the price burden to customers unless customers are actually willing to pay a higher price for the product. Price changes and their receptions are highly susceptible to the kind of customer that usually buys goods from the store. Some clothes are simply status symbols. An example of these are Nike Air Jordans, Carhartt jackets, and so on. When people buy them, they are not concerned with the price of itself, they are really concerned with the social brand value associated to the product created by well-done product placement and marketing. Doc Martens boots once were $30, and now most people can’t find used ones for that price. Passing the burden onto consumers to maintain profit margins so that shareholders are happy does not lead to much of an effect. Certain products that are often reliably priced for upper middle class consumers – a Ralph Lauren or Tommy Hilfiger polo or a Brooks Brothers shirt – would see some issues if the price changed.

    Most US fashion brands are in fact catered to the middle class – those most careful about their money. Macy’s, Gap, JC Penney, and Target already have very low profit margins as consumers prefer Amazon’s superior supply chain over their service and clothing companies have seen benefits of maintaining a small store at a mall or outlet instead, while also maintaining the same production costs as Amazon in some cases. Macy’s has closed 100s of stores that were once shopping mall centerpieces in American Suburbia. As they are losing customers and now have to build a comparable supply chain to stay competitive in many ways, these companies cannot afford to hand the burden to consumers. They have to play a long game and keep their existing customer base.

  3. Question #2 – Not surprising, considering that China makes roughly 40% of clothes and 70% of shoes purchased in the US – we still rely heavily on cheap labor overseas for apparel, specifically: what the US lacks a comparative advantage. Thus, investing in the pivot to near-shore apparel goods would cost us more loss than continuing to increase exports in machinery and capital and tech-intensive-related goods. In return, emerging economies (incl. China) generate economic growth and creates job opportunities through apparel manufacturing.

    Even if the US wanted to invest in re-shoring apparel goods, and thus breaking away from our comparative advantage, repercussions of COVID-19 on the supply chain hinder the ability to break away from heightened concentration on popular routes linking North America to China.

    From a product development standpoint, the switch to re-shoring requires advanced IT and m-commerce capabilities – both of which the US moves towards but has yet to adapt across the entire apparel industry. With the US’ strong RTW market (rather than luxury), the US should keep producing high quantities of basic garments at low costs instead of, for example, adapting a see now buy model to shorten lead times for satisfying spiking demand following runway shows.

    Opinion: playing devil’s advocate, I consider the (unrealistic) benefits and consequences of a 180 to switch to re-shoring apparel goods (though this ignores the comparative advantage theory) and facing limited competition – makes little sense for competitors to break away from popular trade routes amid the pandemic. Since consumers bear the burden of tariffs, evident in hiked-up prices, Biden should at the very least remove tariffs from PPE and collaborate with allies to pressure China.
    _________________________________________________

    Question 3 – My decision would depend on the nature of the brand’s product offerings, wholesale (or lack of) model, peak seasons, brand story, current supplier/manufacturing partners, business model (slow fashion, couture design, fast fashion, ultra-fast fashion), and e-commerce structures. Thinking of necessity, I would not pass the burden to consumers if competitor brands offered lower prices for staple, replenishable pieces; for necessity apparel garments, such as undergarments, I imagine the consumer prioritizes price only. On the other hand, I would pass the burden if my brand story and digital brand experience could offer more value beyond the product, such as through my brand story or value proposition. Here, the consumer likely purchases the product for more than just its function.

    Furthermore, we also need to consider lifestyle changes and increased spending on video games, exercise equipment, disinfectants, and home goods during the past year in place of vacation and restaurants. I would ask how my apparel offerings fit into these changes perpetuated by the ongoing pandemic.

    Regardless, apparel retailers face the decision to survive the shaky supply chain or switch to airfreight, albeit for roughly eight times greater the cost of sea shipment (Goodman, 2021). Asking ourselves whether the company faces delays in routes connecting, for example, North America to Southeast Asia could help narrow down alternative solutions to mitigate unreliable schedules, increased shipping costs, and passing the tariff burden to consumers.

  4. #2 – I am not surprised at all that the tariff war with China has not brought back more apparel manufacturing to the US. This is not an overnight fix. The US would need multiple measures put in place to even accomplish this. With the pandemic on top of it all and the US being completely shut down for awhile it is just easier to keep importing. I think that we can see a clear example of comparative advantage, China is great at manufacturing and as we have talked about in class, the pandemic has reinforced that idea. The US has the capabilities of apparel manufacturing, but we want to put our resources elsewhere, and put them into things that WE are great at exporting. By bringing production back to the US we would be supporting the mercantilism theory by reducing our imports and increasing our exports. I think the US is prioritizing the pandemic right now and not necessarily bringing more manufacturing back to the US.

    #3 – I think CEO’s are being put in a tough position right now, they have to ask themselves if they should pass the tariff burden to consumers or not. If I was put in their position, I honestly would not know what to do. If we raised our prices, we would lose some of our customers (based on simple supply/demand model). If we absorb the costs, then our company loses money. Either way it is a lose-lose, so I think I would create a temporary absorption, where the company would absorb the costs temporarily to keep our customer base and if the situation was lasting for too long, I would either need to make changes to the company or increase our prices. This is just me, but it really depends on what certain companies are prioritizing. In one of the required readings for class, I remember reading about how Joann Fabrics are currently absorbing the cost, but there is going to be a point in time where they can no longer afford that.

    1. Hey, great points about exporting. The pandemic has actually caused the US to reconsider mercantilism and in-house production. Uniquely though, they are trying to do so in a way that is compatible with the factor proportion theory and competitive advantage. The US has a massive advantage in creating software and computer-related applications and wants to leverage that in producing goods. The future for manufacturing is in automation and in making things modular. Software chips are made in American facilities using robots and high-end technicians, not factory workers themselves. Furthermore, many find that their position in the global market may be waning due to China’s economic power. The pandemic has not only enforced that China is a good manufacturer, but also a flexible one that can weather storms as bad as this. I wrote a comment about retail’s issues in Melanie’s post that force them to bite the tariff rather than pass it on and send it to consumers because even before the pandemic, retail was showing major losses and many big stores were planning on closing stores. If they raise prices, people just would not go to the retail store, but rather to amazon, fast fashion sites, and outlet malls that already offer a cheaper price for the same set of goods.

    2. You made a great point how the US would need multiple measures in place to accomplish bringing back manufacturing to the US. The pandemic is definitely a big factor in how firms are manufacturing, and the pandemic has just reinforced how China has the comparative advantage. I also agree that CEO’s are in a tough position right now. It is a lose-lose either way but I personally think that if companies do not pass the tariff burden down to consumers and absorb the price increases themselves it will help them in terms of being successful long term instead of just short term by passing the increase down to customers. Companies won’t be able to absorb the costs forever such as Joann Fabrics, but if the tariff war ended hopefully that wouldn’t be an issue anymore.

    3. Yes, I agree with many of your points. It is quite clear and not at all shocking that we have not seen more apparel being manufactured in the U.S. ever since the tariff war. As we all know, China manufactures many of our goods and we heavily rely on them. This was significantly seen when the pandemic hit. When the coronavirus first struck the U.S. the store shelves were empty and prices went soaring as demand for items went up because things were scarce. This was due to an interruption in the supply chain and us being heavily reliant on China’s fast and cheap labor. However, this reliance did not change once the tariff war began. We still depend on China and we have not seen more apparel manufacturing being brought back to U.S. because it is costly and time consuming for apparel companies to relocate their manufacturing sites and create new relationships with different supply sources.

      I also do appreciate your connection with the trade theories we learned in class. I do agree that I think originally, before the war, comparative advantage was supporting our trade theories as China is able to make the same products as us but more efficiently. However, now we are seeing a shift from comparative advantage. I am not sure if we can say the U.S. is turning to mercantilism due to the confusion for a solution, however, I can see us going in that direction.

  5. #3

    If I were the CEO of a leading US fashion brand, I would not pass the tariff burden to consumers. I feel it would ultimately be best to absorb the price increases due to higher sourcing costs as a company instead of it getting passed down to consumers. Consumers more than ever and society as a whole have faced severe financial problems the last year. Consumers have trouble affording basic necessities let alone the ability to afford apparel and textile goods. I think now more than ever consumers are paying attention to how companies are reacting to the current crisis our world faces and how they are helping consumers. I think by raising prices for consumers instead of companies absorbing the sourcing costs would not be well received by consumers and would come across as insensitive. Not all consumers are aware that a tariff would be the reasoning behind such price increases and may cause consumers to look elsewhere and be upset with the company. If a company were to absorb the sourcing costs, I think consumers will appreciate that and it would create a good image for the company. It will allow consumers to recognize you have their best interest in mind during a time of need instead of just focusing on profits for the company. While it may have a negative effect on the company’s profit margins in the short run I think in the long run it will create more customer loyalty and success in the long run.

    #2

    I think from an industry outsider point of view this result of the tariff war would be a surprise because why wouldn’t this encourage companies to manufacture in the US? Industry insiders are not surprised because they know that it takes years to build relationships with suppliers and establish new supply chains, which does not leave many options for U.S. companies, so that is why they are continuing to work with China. The outcome of the trade war challenges the Mercantilism theory. I think the mercantilism theory was the inspiration behind this tariff as it was supposed to bring more apparel manufacturing back the US, so ultimately more exporting, less importing and producing more domestically, but it was not successful. While more exports and less imports may seem beneficial to the average person, industry experts know it is not always the smartest decision and your resources may be better used elsewhere in a different industry. In this case, the tariff attempted to bring back apparel manufacturing in the US, intended to decrease our imports and increase our exports, but the result was not as expected as apparel manufacturing has mostly remained in China, going against the main purpose of the theory.

  6. #3 If I were the CEO of a leading fashion brand, I would not pass the tariff burden to my consumers. Although passing on this burden will allow me to keep up with the tariffs financially, I don’t think it is ethically correct to do this to my customers. As a company, they should handle any conflicts or obstacles that occur. I don’t think any of the hardships that come with the company should ever come in contact with the consumer. This can lead to many issues for the company in the future. If consumers constantly feel like the company is fluctuating their prices, or changing any other aspects, the consumer can see the company as unreliable or untrustworthy. This can be detrimental to the company and loose the trust and transparency it has created over the years with their customer base.

  7. #5 Before taking our class, FASH 455, I wasn’t knowledgeable on the idea of “tariff engineering.” From my understanding, this is when companies alter how they design their products in order for their to be less tariffs placed on their products. When reading about this, I think this is a great idea and a perfect way for companies to use this loophole in order to get out of paying ridiculous taxes. If the price to make the product is low, then the price of the product that consumers have to pay is low. This ultimately benefits companies and consumers. I do think this should be encouraged throughout the fashion industry. This is because, in my opinion, the fashion industry is really hurting at the moment, and it seems they have gotten hit really hard between the pandemic and now these new tariffs. They are struggling financially to keep afloat. Thus, I am for this tariff loophole in order to help fashion apparel companies to stay in business.

  8. I whish to refer to another person’s comments:
    “The apparel industry needs relatively cheap and unskilled labor to be competitive. The US may have an absolute advantage is most things, but compared to other things, they are not that efficient in making clothes compared to fabric.”
    I disagree, for sewing at good efficiency requires SKILL. The question is more IF Americans want to sew…… for there are many other less boring jobs UNLESS you apply LEAN Manufacturing principles to the sewing floor.
    This will NOT make American sewn products CHEAP, but because of USA made fabric, proximity, high tech machinery, etc. it could put them in the “ballpark”. For example USA made PPE, should be a priority !
    Let’s be honest, sewing will not become the USA’s main industry.

  9. #3 The U.S.-China tariff war continues during the pandemic, resulting in higher sourcing costs for US fashion brands and retailers, which have been struggling hard financially. In such a case, if you were the CEO of a leading US fashion brand, why or why not would you pass the tariff burden to consumers, i.e., ask consumers to pay a higher price?

    If I was a CEO of a leading fashion brand I would try my best to not pass the tariff burden to consumers by making them pay a higher price, because as seen with Macy’s, there was consumer backlash and I would not want to risk losing customer loyalty. It would definitely be difficult to figure out where to absorb those costs, but I think one of the last resorts would be to raise the prices, unless the brand is known for higher prices and the customers are already willing to pay- they may not notice much of a difference.

    #4 Why or why not do you think the tariff war with China has fundamentally shifted US fashion companies’ sourcing strategy?

    I think that the tariff war with China has shifted US fashion companies’ sourcing strategies. I feel that there has been more sourcing from lower cost countries such as Bangladesh and Indonesia to try and avoid these tariffs from China. However, I also believe that it is a difficult process to “leave” China- many fashion companies already have established relationships with Chinese factories/manufacturers and it is not easy to just leave a whole system and begin new sourcing relationships in a short amount of time.

  10. #3: If I were the CEO I would choose not make consumers take the burden of the tariff. I think this would be extremely damaging to the company solely due to the fact that consumers are not willing to pay higher prices for items they know they can get for lower prices. Consumers are more likely middle class. They are aware and money conscious especially due to COVID-19, finances are extremely important. As prices for manufacturing in China are rising, it is important to not raise prices too much. Rising price tags can result in angry customers. There are alternative routes to take instead.

  11. #3 If I were the CEO of a leading US fashion brand, I would pass the tarriff burdedn to consumers. Although many of my classmates above have stated that they would not pass it because it is not fair to the consumers, I feel they are forgetting the part of making tough decisions in order to run a business. If a fashion brand is dominating the U.S. its for a major reason, because the consumers want the products. Realistically raising the pruces isz not going to kill the demand for a brand that is highly desired. Although COVID-19 has put a lot of people out of work, I feel like the average consumer has experienced an increase in prices almost every where they go. Perszonally my nail salon charges a COVID cleaning fee now and my favoreite restaurant raised all of their prices in order to stay alive during these struggling times. Did this hold me back from purchasing? No. Although I hmay have complained about the raise in prices, I also had to understand that these business owners are doing what they need to survive. The same thing goes for a leading fashion brand. As a CEO, I would not be okay letting my business struggle to pay for tariffs when I know I can raise my prices a few dollars and cover the costgs.

    #4) The tarrif war with China definitely has fundamentally shifted US fashion companies sourcing strategies. Throughout the course we have learned that US fashion companies have been considering moving their sourcing out of China. This tarriff war has only sped up this processs by driving brands away from sourcing there. The tarriffs on producyts from China are unafforadable from many countries that are already facing huge monetary losses from the COVID-19 pandemic.

  12. #4)
    The tariff war with China has greatly impacted US fashion companies and their sourcing strategies. China is a major source for fashion and a lot of sourcing is done there. The United States tried to avoid the tariffs with China and source from developing countries, but it is hard to fully cut them off considering many fashion brands have relationships with China and want to continue sourcing apparel from there.

    #3)
    After researching tariff burden, I find it morally incorrect to pass this onto the consumers. Financially it could benefit the company but this could cause them to lose a lot of consumers as they are having to pay more. This is the companies responsibility to handle all financial and personal issues. Bringing this attention to the consumer will give them a bad reputation as well as anger consumers who are now involved in a tariff burden that should not involve them.

  13. #3
    If I were the CEO of a fashion company, I would not pass the entire burden of a tariff on the consumers of the brand. While the company might have to upcharge their products a little bit, the entire burden should not be placed on the consumer. This is because it is not the consumer’s responsibility to help the company with their financial needs on the backend like this. Additionally, if the consumer sees that the prices of clothing or other products went up because of the increase in the tariff, they might be deterred from shopping from that brand.

    #4
    Due to the trade war with China, I believe that this has potentially caused the US to look for other countries to trade with where they know they would be able to pay similar low prices. There are many other textile and apparel industry markets that are thriving so it would only make sense if the US started sourcing in other countries besides China. This is due to the increase in prices of imports from China, as well as the shift to nearshoring resources for the US textile and apparel industry.

  14. Response for #2) I find this expected that the tariff war with China hasn’t brought more apparel manufacturing back to the US. The trade war started with the Trump administration which is still fairly recent. I feel as if the Biden administration were to reverse some of the policies that the Trump administration enacted then there would be very little reason for more apparel manufacturing to move back to the US. If this doesn’t happen soon though then I think we will see more apparel manufacturing in the US. It takes time for factories and businesses to ramp up production here in the US. Also, labor cost is much cheaper in China which is something that the US cannot compete with. If the trade war goes on for many more years, then I think we will see more apparel manufacturing in the US, but I can see the Biden administration reversing some of the policies that brought on the trade war sooner rather than later.

    Response for #6) Something that I didn’t know and found really surprising is that there are still tariffs on personal protective equipment (PPE) such as masks and gowns. The tariffs actually have gone up recently which is something that policy makers should deal with very quickly. Although it seems as if the pandemic is slowing down because many people are getting vaccinated, there is still a large need for masks and since China is a large supplier of them, I feel that the Biden administration should quickly deal with this.

  15. #4 Why or why not do you think the tariff war with China has fundamentally shifted US fashion companies’ sourcing strategy?
    I think that the tariff war with China fundamentally shifted the US fashion strategy, but Covid was the true factor that pushed us companies to source out of China.

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