Thanks to brands like Prada, Phillip Lim, and Balenciaga, the latter of which moved the production of its wildly popular Triple S sneaker out of Italy, a “Made in China” label is not what it used to be. Miuccia Prada has been boasting about the manufacturing capabilities of the Far East nation for years, saying in 2011, “Sooner or later, it will happen to everyone because [Chinese manufacturing] is so good.” Phillip Lim has made it part of his New York-based brand’s mission to help destigmatize Chinese-made products, declaring last year: “For us being ‘Made in China’ was a privileged thing – our products were being made by the most skilful, talented people.”
Yet, while Ms. Prada and co. may stick with “Made in China,” that label is set to look a lot less appealing in the U.S. in the not too distant future, as Donald Trump has announced that the U.S. plans to impose tariffs on up to $60 billion in Chinese-made goods and limit the country’s investment in the U.S. in retaliation for years of alleged intellectual property infringement.
In addition to the trade tariffs – which follow from an investigation by U.S. Trade Representative (“USTR”) Robert Lighthizer, which uncovered “ a range of ‘unfair’ practices in China, including restrictions on foreign ownership that pressured foreign companies into transferring technology,” as well as “evidence that China imposes unfair terms on US companies; steers investments in the U.S. to strategic industries; and conducts and supports cyberattacks,” per the BBC – the U.S. government is also exploring ways to limit Chinese investment in the U.S. and “will seek to bring complaints about unfair licensing terms to the World Trade Organization,” officials said.
Trump has called for tariffs to be placed on “appropriate products,” and as of March, the White House had “a list of more than 1,000 products that could be targeted by tariffs of 25 percent.” It has since added thousands of other products, including handbags, to subsequent lists of proposed items to be hit with 10 percent tariffs subject to a 30-day public comment period and hearings before the USTR this month.
In at least two letters addressed to the President this spring, U.S. apparel and footwear brands, and the American Apparel and Footwear Association (whose member include Calvin Klein, Jimmy Choo, Marc Jacobs, Stuart Weitzman and Ralph Lauren, among others) called on Trump not to impose unilateral tariffs on China in response, as such as tariff “would punish American working families with higher prices on household basics like clothing, shoes, electronics, and home goods.”
Rebecca Minkoff, the mid-market fashion brand that makes a wide array of its products in China, has requested the opportunity to testify before the USTR in connection with the proposed tariff on handbags, arguing that such a tax would not deter intellectual property infringement but instead, give counterfeiters a “leg up” thanks to the price-hikes that would undoubtedly come hand-in-hand with the tariffs.
The footwear companies, in particular, have argued that they are subject to the hefty tariffs on shoes and that “adding even more tariffs on top of this heavy burden would mean higher costs for footwear consumers.”
And it is not merely American companies that have voiced their disapproval. In April, Uniqlo had a message for Donald Trump: Put a tax non-United states-made goods and we are out of here. Now, almost a year later, Tadashi Yanai, the billionaire head of Japan’s Fast Retailing Co. (parent to Uniqlo), might have the chance to make good on his word.
According to Yanai, whose company manufactures all of its apparel abroad, primarily in Asia, with China playing a significant role in helping the retail giant in its high-volume turn-over model, because any additional costs that would be passed on to consumers as a result of Trump’s proposed border tax plan, it would be “meaningless to do business in the United States.”
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