A Little-Noticed Trade War Is Going To Decimate Southern California's Jeans Industry
According to California Apparel News' Deborah Belgum, all women's denim manufactured in the U.S. is subject to a new 38% tariff as of May 1 — a 26-point increase from current levels.
That subsector happens to be concentrated in and around Los Angeles.
Many companies are already making plans to shift production to Mexico, Belgum writes:
Deborah Greaves, the in-house attorney for True Religion, said she had just found out about it and was shocked. “Obviously, it is not good news. It is not something you ever want to hear. We haven’t had an opportunity to assess how it is going to impact our business and what we can do to mitigate it.”
Executives at Hudson jeans were planning to move some of the company's production to Mexico to get around the new duty. But that will take a few months to maneuver. "We can't turn on a dime," said Daniel Barcenas, senior vice president of operations at Hudson. "We have been exporting quite a bit to Europe."
The new levies are a response to America's continued collection of anti-dumping fees. Those were supposed to have ended with the repeal of what was known as the Byrd Amendment in 2006, but U.S. Customs continues to distribute money raised from the fees. Last year, $120 million was paid out to U.S. firms.
U.S. sweet corn, eyewear frames and mountings, and crane truck will also be subject to a new 15% levy.