US textile companies are not only struggling with fashion trends, but also with Donald Trump's tariffs. What happens when fabric and buttons become more expensive before they even get under the needle?
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00:01Joseph Ferreira runs one of the few American textile companies
00:05that still produces in the United States.
00:08He does not want to move his New York-based business
00:11to a country with lower wages.
00:14He has invested millions of dollars in this factory in recent years.
00:19The ongoing tariffs on imports to the U.S. are hurting his business.
00:24Things like fabric that we import from Italy are more expensive.
00:31Buttons from around the world are more expensive.
00:36Materials for us represent about 30% of our inputs.
00:4170% of our inputs are labor.
00:44He can barely save costs with his 115 employees,
00:47so he has to compensate for the additional costs from the tariffs elsewhere.
00:54We're going to share the pain.
00:56We're going to absorb the cost of higher materials internally as much as we can,
01:01but there will be some pass-through of our prices to our customers.
01:06Joseph Ferreira is unhappy about the U.S. government's volatile tariff policy.
01:11It is inconsistent, lowering and raising tariffs suddenly,
01:15as it has in the negotiations with China.
01:18And the ongoing agreement is only valid for three months.
01:22That's not enough for him to plan for his business.
01:25Is it 10%? Looks like.
01:28Is it 20%? I don't know.
01:30Is it 40%? We don't know.
01:32Is it 145%? We don't know.
01:34We need certainty, and we need it soon.
01:36The unpredictable trade policy is also disrupting the logistics sector.
01:41Imports grew during the first few months of this year,
01:44before falling significantly.
01:46That led to a sharp rise and drop in freight volumes and prices.
01:50So logistics is unpredictable too.
01:53In anticipation of Trump's tariffs, many businesses try to raise their imports
02:07and stockpile their inventory, their warehouse, as much as possible,
02:12and evidences, the import reports.
02:17That was the case for Galia Gundelova's business.
02:20The Bulgarian, who moved to New York over 20 years ago,
02:23sells clothes made in Bulgaria.
02:26Right now my fall collection, usually I ship in August,
02:31but now I'm trying to rush everything and ship in June
02:36to fit into this 90-day window where we still have the old tariffs.
02:42Many Americans would like to see more people employed in the textile industry.
02:47But it's not the kind of work most will be lining up to do,
02:50according to the libertarian Cato Institute.
02:52There is already a shortage of hundreds of thousands of skilled workers
02:56in the U.S. textile industry,
02:58and higher tariffs alone won't raise domestic production.
03:01Americans consider prices when shopping,
03:04and they're quick to complain about inflation.
03:06That's why clothing store owners believe
03:08that they will continue to import most of their stock.
03:11It's going to take many, many years to kind of ramp up an entire industry here.
03:18So in the short term, we're going to suffer,
03:20our customers are going to suffer,
03:21our brands are going to suffer,
03:23and everyone is just trying to make the best of it.
03:28Joseph Ferreira, too, doesn't see the government
03:31creating the right incentives to invest in the United States.
03:36We're going to lower the tariffs on machinery and equipment.
03:43The apparel industry is behind.
03:45We haven't invested in our industry in 35 years.
03:48Other countries have.
03:49They have advanced equipment and machinery that we need to buy
03:52and bring into this country.
03:55Trump's economic policy has unsettled the U.S. textile industry,
03:59and businesses are now taking a wait-and-see approach.
04:04So we're going to get involved.
04:05We're going to start working with them.
04:07This time we're going to stop playing with the U.S. Constitution.
04:09update this process.
04:10The U.S. State Office of influenza
04:13will be made available for years.
04:14And hopefully it will be made available for years.
04:15So we're going to start working with the U.S. Party.
04:16we're right now to attend the U.S. Constitution.