During our Monday morning meeting this week our conversation turned toward the China tariffs and the effect that they are going to have on the cost of clothing (among other things) in the very near future. Many of our past colleagues and friends in local retail buying offices have also hinted at future price impacts. As we started talking more in depth, we thought that it would be a good idea to update all of you about what to expect to see in the coming months.

Stay Stylish (and Savvy),

Megan and Kimberly

What is All This Tariff Talk?

In case you haven’t been following the tariff situation as closely as we have, here is a brief breakdown of what is slated to happen in the new year. The current administration recently imposed tariffs on an additional $200 billion worth of Chinese goods, including clothing, shoes, home goods, children's products, and furniture. After an initial 10% increase in late September, the tariffs will increase to 25% at the start of 2019. 

How Tariff’s Will Impact Clothing Costs?

According to the National Retail Federation, it is estimated that currently more than 41 of clothes and 72 percent of shoes sold domestically are Chinese-made.  That means that the 25% duties will likely be passed along in the retail cost of apparel and other items to protect seller’s margins. While many retailers are looking to shift manufacturing from China to other countries, this will take time as seller strategies solidify. In addition, be prepared for a likely shift in quality as new factories are getting up and running and skilled labor is developed. Many large retail brands may already be diversified in their manufacturing base but in recent weeks even they have warned about impacts.

What to Buy Now

While we can’t predict the future, we can be more savvy shoppers in how we invest in our wardrobe. Be proactive and look at your favorite pieces in your closet, then look at the tag—Where was it produced? Being aware of what you are buying and from where is the first step.

You can expect to see prices rise in early 2019 across the board on clothing items and we are predicting is may range anywhere from 10-25%. If you apply that across an entire wardrobe it certainly adds up. That said, you will probably feel it more in certain categories, where the US imports primarily from China.

Here are a few items that we recommend for shopping now:

1. Eyewear/Sunglasses - The U.S. imported nearly $1 billion worth of sunglasses, goggles, and other eyewear last year from China. according to data from the U.S.

2. Scarves/Shawls - China is also the top source for scarves and shawls.

3. Sweaters - Your cold weather favorite is about to get pricier. The U.S. imported $4.6 billion worth of sweaters from China in 2017.

4. T-Shirts/Tank Tops - $606 million in T-shirts, tank tops and other casual shirts were imported from China last year.

5. Intimates - America imports more women’s underwear from China than from any other country. Last year, Made-in-China bras, girdles, corsets, suspenders and garters sent to the U.S. were worth $1.2 billion.

6. Denim- Your true blues may get a hike as much of our “American” denim is now loomed and produced in China.

Curious to read a little more?

Here are a few educational articles we found helpful around the impacts of the current trade war conversation:

Bloomberg: China's Factory Heartland Braces for Trump's Big Tariff Hit

Retail Dive: Retailers warn of price hikes as China tariffs take hold

WSJ: Holidays Gifts May Escape Tariffs, but Retailers Won’t

Refinery29: Why Is The European Union Going After Our Jeans?