‘This New Sheriff Loves Tariffs’: Industry Groups on the Problems and Potential That Come With Second Trump Presidency
The next inhabitant of the Oval Office has been decided, and the shift could represent a sea change for apparel, footwear, textiles and retail.
Though the fate of Congress remains in flux, industry groups aren’t waffling when it comes to the problems, and potential, that could come with a second Donald Trump presidency.
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Their perspectives have been percolating throughout the 2024 election cycle, and this week, those representing the interests of the fashion sector are solidifying their objectives in working with the incoming administration on the key issues of trade and tariffs.
“There’s going to be a new sheriff in town, and this sheriff loves tariffs,” said Steve Lamar, president and CEO of the American Apparel and Footwear Association (AAFA). “It’s what a lot of people in the industry have been modeling for, bracing for or planning around for some time now.”
But the question moving forward, in Lamar’s estimation, is whether the president-elect plans to use tariffs “as an outcome or as a point of negotiation.”
During his first term, Trump levied tariffs on $380 billion-worth of China-made goods. Following the aggressive taxation measures, the U.S. and China worked out a Phase One trade agreement in early 2020 with the goal of rebalancing the trade relationship and protecting American intellectual property and technology.
It was largely viewed as a failure, and the enmity between the superpowers deepened, settling into a years-long trade war that still runs hot today.
Now, Trump has proposed taxing Chinese imports at a rate of 60 to 100 percent, and he’s widened the scope of his tariff strategy to, well, the entire world. One of the central tenets of the incoming president’s economic plan is establishing a universal baseline tariff of 10 to 20 percent on products from around the globe—even from countries already covered by free-trade agreements and preference programs.
As recently as this week, Trump added another wrinkle to his tariff strategy, saying he’d levy duties of up to 100 percent on Mexico-made goods—a move he believes would incentivize the U.S.’ largest trading partner to crack down on illegal border crossings.
“If tariffs are going to be for negotiating leverage, then it’s a little bit of a white-knuckle ride until we get to an outcome that’s good—a trade agreement, or something else that that improves the market access opportunities brought about by trade,” Lamar said.
By contrast, “If he’s using tariffs as an outcome—’I’m going to put tariffs on, and then be done,’—then we have to figure out, ‘How do we not break the economy?’” he added. “We’re a consumer-driven economy, and tariffs are inflationary, there is no question about that.”
Article 1, Section 8 of the Constitution gives Congress authority over the implementation of tariffs, “but over decades—generations, even—Congress has delegated that authority to the Office of the President,” giving the Commander in Chief a wide berth when it comes to taxing foreign countries on an array of products.
“There’s a lot of flexibility for the president to decide what those circumstances might be,” the AAFA lead said—and it’s also unclear when, or if, a potentially Republican-led Congress would be compelled to refute the president’s liberal application of duties on China or any other nation.
What started as an “initiative to punish China” could actually end up helping the U.S.’ greatest trade adversary and economic competitor should duties indeed be applied to goods from other nations, Lamar believes.
“If you start hitting all these other countries with tariffs, now you’ve given China a phenomenal opening to establish closer relationships with them,” he said. “All of this seems to be something that could really backfire, not only in terms of advancing international economic interests, but also in how you affect the U.S. economy.”
“If all of a sudden the price of everything goes up—which will happen—how much will that disincentivize consumers from going out and shopping, from going out to the stores?” he added.
But something about Trump’s tariffs-all-around policy has resonated with voters. Matt Priest, president and CEO of the Footwear Distributors and Retailers of America (FDRA) said Trump’s preeminent campaign promise “tapped into the American people’s views on where they stand on the economy… in the sense that the president-elect committed to tamping down inflation.”
Voters likely believe, as Trump has implied, that tariffs on foreign-produced goods will offset the cost of the income tax cuts he’s promised to renew and expand upon taking office. Consumers will have more money in their pockets to spend on essentials including clothes and shoes—and hey, maybe American brands will finally bring some production back to the U.S. if it’s too costly to do business overseas?
But footwear and apparel brands have had experience with tariffs since the Trump Section 301 duties first took effect, and their impacts have been both broad and nuanced.
American shoe companies had been steadily diversifying production away from China for years before the 2019 duties came into play, Priest said; in 2010, about 89 percent of the footwear sold in the U.S. was made in China, and now, that number is just north of 50 percent. “We’ve diversified significantly now,” Priest said, calling the punitive duties “an accelerant that was poured on the process.”
But it’s been tough to quit China altogether given its unmatched production capacity and its unique ability to churn out the many parts and pieces that make up a sneaker, for example. “This is an area where the impact [of tariffs] is very company specific,” the FDRA head added.
Now, the group views its job as working “in a collaborative spirit to educate the incoming administration on the impacts and seeing where we can land” on the issue of tariffs.
“Our members like certainty. There’s a lot of uncertainty,” he said. “There’s going to be uncertainty on the cadence, the timing and the veracity of which tariffs will be implemented, along with when, how, by what mechanism,” Priest said. “That all remains to be seen.”
The Trump-era tariffs on products like China-made footwear have remained in place through two administrations. However, Priest is still hopeful that a new Trump cabinet featuring fresh perspectives and a new cast of characters will see the benefit of rolling back duties on products consumers need, especially after they’ve faced a painful period of high prices at retail.
“[Trump] is a person who is difficult to box in, and if he finds utility in doing something that he thinks that will accomplish his goals, he will do it,” Priest believes—even if that choice goes against his already-stated intentions. “I think we just have to be convincing and find the right people to engage with him on it.”
Priest also perceives an opportunity to work with the new Trump administration on taxes, as the president-elect has been bullish throughout his campaign about driving down the corporate tax rate.
“If our tariff burden is still going to be $4 billion a year, how do we become more competitive with the tax rate in order to find some savings that way?” is a question he anticipates unpacking. “Anytime we can provide more revenue or capital coming through our companies to employ more people or provide for investment opportunities, we’re going to support that.”
Should Republicans hold onto the House—after flipping the Senate and wresting control of the White House—“tax reform could move relatively easily,” he predicted.
But there are other factors at play that could limit the president-elect’s ability to pass his agenda—like if the Democrats gain control of the House. Congress has been a hotbed of dysfunction for some time, and one that stays divided will likely remain so. The margins of victory in both chambers will be slim no matter what, contributing to the continued rancor.
“If the Democrats take control the House, there’ll be a lot more brakes on the [Trump] system,” Priest said. “In a Republican-controlled house, I think it will easier, but it’ll still be very tight. They’re going to have to really stay unified, which I think out of the gates is easy… but as we head towards the midterms in 2026, if the president is down on approval ratings and members are concerned about their jobs, then that unity will evaporate pretty quickly.”
According to Priest, “2025 will be a pivotal year” for the Republican agenda, before Congress heads into the midterms.
With the goal of bolstering and protecting domestic industry, Kim Glas, president and CEO of the National Council of Textile Organizations (NCTO) said the group is hopeful about working with the incoming administration on issues like tariffs.
“Our industry has lost 21 manufacturing facilities over the last 18 months, and we have strongly supported additional penalty tariffs to hold trade predators accountable for unfair trade practices and forced labor issues,” she said. “Our priority issues have not changed and will not change regardless of the administration. I think the urgency is even more so as we continue to lose textile operations.”
While NCTO has long supported duties on China-made consumer goods, the group supports tariff exclusions for products that the American textile sector needs to facilitate its domestic manufacturing operations. For example, the Biden-Harris Administration last month announced the launch of a Section 301 duty exclusion process for certain production machinery made in China, including spinning, knitting, weaving and sewing machines.
Glas is also cognizant about the impact global tariffs—and punitive duties on Mexico—could have on the growth of the industry’s regional supply chain.
“Our industry has a strong working relationship with our Western Hemisphere trade partners; we have a co-production chain” facilitated by the U.S., Mexico, Canada Agreement (USMCA) and the Dominican Republic-Central America Free Trade Agreement (CAFTA-DR), she said. “We hope that there’s a prioritization on countries that are chief violators of the trade environment, namely China and those who are using Chinese inputs to subsidize [their output].”
The group aims to stress the importance of maintaining the health of this burgeoning value chain while maintaining guardrails, like strong yarn-forward rules of origin, that limit China’s influence on emerging production markets.
“We also want to be mindful that putting penalty tariffs on finished textile and apparel goods while maintaining the de minimis loophole”—which allows foreign shipments worth $800 or less to enter the country duty free—“will exacerbate the problem that our industry is facing,” Glas said.
China has been the primary beneficiary of de minimis, with firms like Temu and Shein relying on the trade provision as a bastion of their market strategy. “Our industry wants the Trump administration, in the first 100 days, to fully close the de minimis loophole as they’re looking at potential penalty tariffs,” she added.
Finally, Glas said textile industry trade group plans to push hard for an expansion of domestic procurement requirements for textiles and apparel by government agencies—a need that was thrust into the spotlight during the Covid-19 crisis when both federal and state governments leaned heavily upon the U.S. textile industry to save them from a crippling shortage of personal protective equipment (PPE).
Today, those pandemic-era contracts have expired and the industry feels that its critical contributions have been forgotten.
The government has a responsibility to back domestic industry, Glas believes, and she’s out to push for reforms. The Berry Amendment, for example, which requires the Department of Defense (DoD) to prioritize the purchase of American-made goods like clothing, fabrics and footwear for service member uniforms, has demonstrated “loopholes” that Glas believes could be tightened to benefit U.S. makers.
Meanwhile, the Buy American Act, which applies to goods bought by the Department of Commerce, Department of Interior, Department of Justice, Department of Health and Human Services, Department of Veterans Affairs and more, includes a domestic content procurement preference of just 65 percent in 2024.
“Our industry really needs consistent contracts by the U.S. government,” Glas said. “We are a strategic sector.”
Meanwhile, representing over 200 retailers around the country, the Retail Industry Leaders Association (RILA) is urging lawmakers to work with stakeholders in the industry to mitigate the impacts of higher product prices on the nation’s specialty retailers, department stores and off-price channels.
“Inflation was clearly a motivating factor in (Tuesday’s) election results, with many middle-class voters expressing deep concern about the impact inflation has had on family budgets,” said RILA president Brian Dodge on Wednesday. “Policymakers should hear their concerns loud and clear as debates on taxes and tariffs take center stage.”
Dodge said the group’s membership is hopeful that the incoming administration and Congress will “take a strategic approach to international trade, with policies that shield families from higher prices on consumer goods.”
“The retail industry is the largest private employer in the United States. Decisions made over the next four years will dictate how leading retailers operate, invest in their workforce and local communities, and drive billions in supply chain investments and economic development,” he added.
National Retail Federation president and CEO Matthew Shay was more succinct, saying that while new trade policies could stand to “increase America’s competitive advantages” in innovation and infrastructure, “the adoption of across-the-board tariffs on consumer goods and other non-strategic imports amounts to a tax on American families.”
“It will drive inflation and price increases and will result in job losses,” he asserted.
Moving forward, though, American retailers are ready to roll up their sleeves and engage with the administration to advance its priorities.
“The retail industry stands ready to work with president-elect Trump and Congress to enact tax, trade and regulatory policies that make America more competitive, increase domestic investment and create jobs,” Shay said.