The new US administration's Made-in-USA push is prompting some US clothing retailers to expand domestic production of everything from T-shirts to coats and suits.
But limited capacity makes a large-scale shift to US production unlikely, and American-made clothing comes at higher cost because of elevated labour expense and tariffs on materials.
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But limited capacity makes a large-scale shift to US production unlikely, and American-made clothing comes at higher cost because of elevated labour expense and tariffs on materials.
WATCH MORE: https://thestartv.com/c/news
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LIKE: https://fb.com/TheStarOnline
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NewsTranscript
00:00Already, numerous car companies have announced that they will be building massive automobile
00:23plants in America, with Honda just announcing a new plant in Indiana.
00:29One of the largest anywhere in the world.
00:32If you don't make your product in America, however, under the Trump administration, you
00:36will pay a tariff, and in some cases, a rather large one.
00:54I mean, Trump said it from the beginning that he was going to do this.
00:58I think all of us just hope it was a negotiation ploy, which I still think it is, because
01:03it can't be long-term, because it would have a devastating effect on the economy.
01:08When we get a price increase, if we can't absorb it, we have to pass it on, and that's
01:13what it amounts to.
01:14It's going to be a tax or a price increase, however you want to call it.
01:19It's a cost to us, and we'd have to pass it on.
01:23Let's hope it doesn't come to that.
01:25We're definitely getting a lot more testing the waters of domestic manufacturing.
01:32Just this morning, I received an email from somebody we made shirts for 20 years ago that
01:37used to work with my father here, and they said, hey, we'd be interested in doing, maybe
01:42getting into a little bit of small batch production again with you.
01:45Over the last, probably six months since November, simply, we've definitely gotten a lot more
01:51interest in domestic production again.
01:55It certainly seems to be a hot topic in the industry.
01:58I think that there's got to be a cautious approach to how much business we bring into
02:02the facility.
02:04We certainly don't want to overload it and kick out the existing customer base that has
02:09been a steady with us.
02:11We all get excited with new business, but I think it has to be measured about how much
02:15we bring in.
02:17That's going to be a challenge to scale it.
02:20We live and die by the cost sheet, which means how much does it cost to make a jacket,
02:25a fine tailored jacket.
02:27When we look at manufacturing inputs, there are two main inputs.
02:30The first input is labor.
02:32The second input is materials.
02:3470% of what we make here is labor, 30% is material.
02:39The tariff situation, I think, has certainly created a lot of uncertainty in the marketplace.
02:46We feel a lot of pressure from China, Indonesia, Malaysia, Vietnam, India.
02:53It's definitely a global market.
02:55We source right now from China 100% of our buttons because there is no domestic supply
03:01chain for American-made buttons, so there's no other option for me to go.
03:07The first initial 10% increase was combined with an 8% increase on the side of China.
03:15My prices went up 18%, which basically translates to about a $5,400 per order extra charges
03:23in just buttons alone.
03:26Policymakers understand really well headline risk.
03:30The headline hits, and whether it's an automated system that reads an institutional news feed
03:37and instantly executes a trade, or a human that sees what's going on, sees their portfolio
03:46needs to be rebalanced, it's the same reaction function.
03:48They're reacting to the headline.
03:51That's what markets do.
03:52They price the present value of today's risk for tomorrow.
03:57The U.S. has de-industrialized over the last few decades.
04:02We've offshored a lot of our industrial capacity.
04:06If you look at the performance of the working class American, the best indicator for that
04:14is actually real median household income.
04:18I think what the President rightly recognizes is we need to shift back to being an industrial
04:24power if we want to be a strong nation.
04:27We have to be a nation that makes things.
04:30To accomplish that, you need a multitude of policies working together, and tariffs are
04:35one of those policies.
04:38We've seen throughout our country's history effective use of tariffs to drive domestic
04:44production.