China Tariffs

Back in the early 90s, I built a schmata business. I was the sidekick to this hustler whose father-in-law, aka Jewish mobster, backed him. It was quite the experience. I grew the business from the two of us and a part-time designer to a full-time designer with a staff of one and three more salespeople, including a receptionist, and a new office. The revenue grew by 85% in a few years.

The experience was defining and short-lived. We made all of our products in Long Island City. It was around this time that making products in China began to soar. I had been a buyer at Macy’s before this job, and we were beginning to make huge bets on merchandise from China because the margins were so good. It changed forever how department stores operate and where clothing is made.

Then came the roar: Make it in America. The politicians have all jumped on this bandwagon. 75% of Americans opt to buy a product that is made in America vs. China. It sounds good. Let’s start making all our clothes in America and return to the factory jobs. There will be more robots than humans, but it will benefit the USA. Now, your t-shirts that cost, on average, between $20-30 will cost $70 because the labor cost is much higher, including medical insurance, and the materials cost more to make. Remember that buying clothing, regardless of where it is made, fuels our economy.

Perhaps technology will make products made in America less expensive so that we can make more products here; that would be amazing, and maybe that is happening. My guess is we might be creating a huge tariff with China to protect our workers, but the cost for the consumers is going to be gut-wrenching unless, of course, we move everything to Vietnam.