How Much More Expensive Will Clothes Be at Trump’s Tariffs for Imports to China?
By now, you may have heard that raising tariffs on imports from China can affect the cost of everything from sneakers to garden furniture by up to 25%.
But in many categories, it’s still unclear how this increased cost might affect the end consumer: it’s you trying to buy a shoe or a garden chair.
Everlane, a direct-to-consumer apparel company, showed the New York Times how much the prices of its popular products could change if the new tariffs were included in manufacturing costs.
Take, for example, the women’s cashmere sweater, which is priced at $ 100 after production, shipping, current import tariffs, and of course, profit (hey, this is a business).
With an estimated new rate of $ 11, that sweater price could be increased to $ 124.
Or consider a pair of men’s chinos at the current price of $ 68. With an additional $ 6 in the new tariffs, the price could rise to $ 82.
The times quoted are approximate for each garment, which might frustrate those already skeptical about Everlane’s transparency practice. But part of the reason we’re not seeing price dramatic changes yet is that retailers are still looking for ways to reduce these additional costs.
Everlane manufactures many garments in China, but it is not the only manufacturing facility. Some companies may relocate production to other popular, albeit problematic, garment manufacturing locations such as Vietnam or Bangladesh to get around tariffs. But this process is far from instantaneous.
Companies are also looking for ways to cope with tariff increases to keep customers happy. Everlane, for example, said it calculates its prices and margins so that the cashmere sweater should not increase by $ 24. But it may be easier for some companies than others.
“Companies with lower margins will find it harder to cover the higher costs of products that are affected by tariffs,” writes Sapna Maheshwari of The Times. The Forever 21 will be harder to find wiggle room in its manufacturing costs for a $ 9 shirt, where it makes a tiny profit, compared to a slightly slower and more upscale retail model like the Everlane.