US apparel companies are preparing for tough times as the US-China trade war begins to escalate once again, according to The Wall Street Journal.
President Trump promised to reinstate tariffs on Chinese goods at the beginning of September and China has already made moves to retaliate. Last week, Trump walked back on some of his tariff threats, agreeing to delay tariffs on some imports like phones and electronics until December.
Around 40% of all clothing and 70% of all shoes sold in the US come from China. The apparel industry will be hard hit when tariffs on some Chinese goods begin again on September 1. About $33 billion in apparel and shoes are among the items that will be subject to a 10% tariff on imports. A large portion of winter gear is made in China and will be subject to the tariffs as winter clothing sales increase.
The increased tariffs will be especially difficult on apparel companies that are already faced with hard times and razor thin profits.
Wade Miquelon, CEO of Jo-Ann Fabric and Craft Stores, said, “Tariffs could wipe out their profits.”