Apparel Makers Feel the Rush to Bring in Goods From China Early
With additional tariffs on Chinese imports being threatened, Los Angeles clothing makers are feeling the pinch to bring in goods earlier to save money.
Particularly affected are manufacturers that import Chinese fabrics, which had an additional 10 percent tariff placed on them in September as part of the Trump administration’s decision to add tariffs to $200 billion worth of Chinese imports.
Steve Barraza, owner of Tianello, a brand of women’s blouses cut and sewn in a factory with 40 garment workers near downtown Los Angeles, normally would have waited to bring in his once duty-free silk and other fabrics from China after the new year. But with the new 10 percent tariff, which could go up to 25 percent in March, he decided to take no chances.
In early December, he brought in 5,000 yards of assorted silk prints and 20,000 yards of Tencel fabric to carry him through his Spring orders. “I bought twice as much as I needed,” he said. When I bring it in early, I have to pay for it early and sit on it, but it is better to sit on it now rather than pay more for it later.”
Barraza, who started his company in 1992 and has weathered many ups and downs in apparel manufacturing, is one of many Los Angeles apparel makers trying to figure out how to cope with this uncertain world of impending tariffs and trade wars.
Everyone is carefully watching the current trade negotiations between the United States and China, which could determine whether those 10 percent tariffs are upped to 25 percent in March on an additional $267 billion in goods.
“Our strategy has been to get things in as early as possible,” said Michael Weisberg, chief executive of Second Generation in Los Angeles, whose juniorswear labels include BeBop and Gypsies & Moondust.
His brother Gregg, the company’s chief operating officer, flew over to China a few weeks earlier than normal “to make sure things are getting out faster,” he said. “Our inventory on Dec. 31 was 10 percent higher than last year.”
In the juniorswear market, margins are very tight on clothing, which sells at modest price points. “We don’t have the ability to fly things over to get things delivered. It doesn’t make us money,” he explained.
Scott Wilson, an apparel adviser and contractor, said he has a Japanese client already discussing how to ensure that orders being produced in October aren’t affected by possible tariffs. “In the past, the Japanese company has generally shipped us the fabric for their polo shirts made here and sold in Japan,” he said. “But they have asked us to source their 100 percent cotton piqué fabric domestically,” he said. “They have been concerned with tariffs like everyone.”
David Vered, president of YMI Jeans, which makes a good percentage of its jeans in China, said he isn’t adjusting his import plans too much this year because Chinese New Year, which normally takes place in February, has been the traditional deadline to get goods done and shipped. During that Chinese holiday, most factories shut down for two weeks to four weeks.
“The Chinese New Year is always the deadline to get goods in from all those factories, which will close at the end of January and won’t open until the middle of February or the end of February,” he said. “We will have our last container out by the end of January.”
Vered, however, said he isn’t too worried about new tariffs. He believes something will be worked out between the United States and China to avert a trade war. “My hope is they are going to find a resolution and a happy medium,” he noted. “If we go into a trade war, it will be very disruptive for the American economy and the Chinese economy.”