Ground Game: Tariffs and clothing, Trump and Netanyahu meet again, Alabama GOP concerns and caveats
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By Meg Kinnard
Sending children back to school in new sneakers, jeans and T-shirts is likely to cost U.S. families significantly more this fall if the bespoke tariffs President Donald Trump put on leading exporters take effect as planned, American industry groups warn. We take a look at the possible implications for U.S. consumers, how the industry has tried to prepare and who might be the winners and losers in a garment trade war.
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THE HEADLINES
Trade groups warn tariffs will make just about everything Americans wear cost more
About 97% of the clothes and shoes purchased in the U.S. are imported, predominantly from Asia, according to the American Apparel & Footwear Association. Walmart, Gap Inc., Lululemon and Nike are a few of the companies that have a majority of their clothing made in Asian countries.
Those same garment-making hubs took a big hit under the president's plan to punish individual countries for trade imbalances. For all Chinese goods, that meant tariffs of at least 54%. He set the import tax rates for Vietnam and neighboring Cambodia at 46% and 49%, and products from Bangladesh and Indonesia at 37% and 32%.
Working with foreign factories has kept labor costs down for U.S. companies in the fashion trade, but neither they nor their overseas suppliers are likely to absorb new costs that high.
Industry experts say reviving the American garment industry would be hugely expensive and take years if it were feasible. The number of people working in apparel manufacturing in January 2015 stood at 139,000 and had dwindled to 85,000 by January of this year, according to the Bureau of Labor Statistics. Sri Lanka employs four times as many despite having a population less than one-seventh the size of the U.S. Read more.
Of note:
According to a report by British bank Barclays published Friday, the winners in the tariff wars are retailers that have at least one of these attributes: big negotiating power with their suppliers, a strong brand name and limited sourcing in Asia.
In clothing and footwear, that includes off-price retailers Burlington, Ross Stores Inc. and TJX Companies, which operates T.J. Maxx and Marshalls, as well as Ralph Lauren and Dick's Sporting Goods. The companies in for a tougher time are those with limited negotiating power, limited pricing power and high product exposure in Asia, a list including Gap Inc., Urban Outfitters and American Eagle Outfitters, according to the report.
Trump and Netanyahu will meet again on Monday
Trump plans to meet with Israeli Prime Minister Benjamin Netanyahu on Monday in what would be their second White House sit-down since Trump's return to office.
The visit, confirmed by a White House official and Netanyahu's office Saturday, comes as Israel deploys troops in a new security corridor across Gaza to pressure the Hamas militant group. Netanyahu's defense minister has said Israel will seize large areas of the territory and add them to its so-called security zones.
Last month, Israel shattered the ceasefire with a surprise bombardment in Gaza after trying to pressure Hamas to accept proposed new terms for the ceasefire, a move supported by the White House. Hundreds of Palestinians have since been killed.
Israel has pledged to escalate the war in Gaza until Hamas returns the remaining hostages seized in the Oct. 7, 2023, attack that sparked the war, disarms and leaves the territory. Israel also has halted all supplies of food, fuel and humanitarian aid into Gaza. Read more.
Of note:
In February, Netanyahu became the first foreign leader invited to the White House during Trump's second term. Their meeting focused on Israel's war with Hamas and the next steps as a ceasefire deal took hold. Netanyahu's office in a statement on social media said he and Trump would discuss 'the tariff issue, the efforts to return our hostages, Israel-Turkey relations, the Iranian threat and the battle against the International Criminal Court.' Israel faces a 17% tariff.
Israeli strikes on Gaza kill 32, mostly women and children
Netanyahu is rocked by a new scandal linking his close advisers to Qatar
In conservative Alabama, Republicans cheer Trump, with some quiet caveats
On a day when stock markets around the world dropped precipitously, Alabama Republican Party Chairman John Wahl led a celebration of the president whose global tariffs sparked the selloff.
With no mention of the Wall Street rollercoaster and global economic uncertainty, Wahl declared his state GOP's 'Trump Victory Dinner' – and the broader national moment – a triumph. Yet beyond the cheerleading in response to Wahl's remarks at last week's gala in downtown Birmingham, there were signs of a more cautious optimism and some worried whispers over Trump's sweeping tariffs, his deportation policy and aggressive slashing of his Department of Government Efficiency.
'There are some concerns, some conversations,' said John Merrill, a former secretary of state, over just what Trump's agenda will mean on the ground.
Terry Martin, a county GOP committeeman in Tallapoosa County, said he supports the tariffs as leverage. But, 'the parts that are coming from overseas … it's going to pop it up' in price, he said, at least in the short term.
Wahl, in an interview after the gala, took a more nuanced approach than he did at the podium.
Angry protesters from New York to Alaska assail Trump and Musk in 'Hands Off!' rallies
IN PHOTOS
ON THE CALENDAR
On Monday, Trump hosts the 2024 World Series Champion Los Angeles Dodgers and meets with Netanyahu at the White House.
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