As Donald Trump proceeds with his potential trade war with China after the 50 billion dollars in tariffs he slapped on them, the U.S. apparel and manufacturing industry is breathing a sigh of relief because thankfully the actual shirts and shoes imported from China won't be subject to the tariffs. However, that doesn't mean economists and investors should rule out the tariffs doing any damage to the apparel and retail industry given how globalized it has become. Most of the equipment used to produce Made-in-USA apparel also won't be subject to the tariffs including textile printing equipment, sewing machines, and looms as reported by Business of Fashion.

“We applaud the decision to remove most of the equipment and machinery used in our domestic textile, apparel and footwear manufacturing that were proposed by the administration in April,” said Rick Helfenbein, president of the American Apparel & Footwear Association, an industry trade group, in a statement. “Levying a tariff on these items would have increased costs for domestic manufacturers across our industry, leading to higher prices and lower sales.”

Trump's potential trade war with China could hurt U.S. supply chain

While most apparel and manufacturing is no longer done in the United States, for companies who still do any production domestically, there was fear that the cost of higher tariffs could be pushed onto consumers. The looming threat of retaliation still looms over the apparel industry's head, so it isn't smooth sailing yet.

In a vow to retaliate, China has targeted 1 billion dollars worth of cotton exports to America that could hurt American farmers, textile manufacturers and increase supply chain costs according to Helfenbein. The first set of tariffs totaling 34 billion dollars will take place on July 6, while other 16 billion are still under review according to a U.S. Trade Representative.

A study from the National Retail Federation found that imposing tariffs on China would not do anything to reduce China's, cut America's gross domestic product by 3 million dollars, and also cost the U.S. 134,000 jobs. The only thing that would come out of this is political instability and higher prices for American consumers.

Despite all the controversy over Trump's tariffs, a recent article by The New York Times, said that the tariffs would have little immediate impact on China due to the size of the country's 13 trillion dollar economy. China no longer actually depends on exports, and they could easily find other countries in which to sell their products. On the other hand, China's tariffs on the U.S. could disrupt our global supply chain, so the U.S. would be the only one hurting in this situation.

 

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