Trump, Tariffs, and Textiles
Peter Ackroyd, the newly appointed Chairman of Campaign for Wool, comments on Trump tariffs and possible impacts to the textile industry. ‘Trump, in his inaugural oration to the assembled great and not so good under the White House Rotunda on January 20th made deliberate reference to Republican President William McKinley (1897-1901), noted for his commitment to US industrial manufacturing independence via high import tariffs and a policy of colonial expansion resulting in the Spanish American War that saw Puerto Rico and the Philippines come under US administration. He was assassinated by an anarchist at the Pan American Expo in Buffalo, New York in 1901.
It was not during McKinley’s term as president that draconian tariffs on major agricultural products, particularly wool and cotton, were imposed. This happened a little earlier when he was a Representative for Ohio in 1890 and the Republican Party at the time was trying to woo the all-important agricultural vote that made up a large percentage of the US electorate.
A +50% duty into the USA, imposed almost overnight on wool tops combed in the UK, led to James Hill and indeed many other mills in Bradford, closing several production lines and seeing a subsequent significant slump in profits in the autumn of 1890.
The McKinley early obsession with tariffs was relatively short lived after it quickly backfired. Whilst the move may have temporarily placated agricultural workers across the country, it seriously upset a rapidly growing number of city dwellers who saw this early example of America First policy as the sole cause of high street price hikes, primarily for food and clothing.
When McKinley was elected president in 1897 he resumed a robust trade protection policy, but preferred mainly to concentrate on the once very un-American pursuit of colonial expansion. He was instrumental in beginning the construction of the Panama Canal, a venture prioritised by his post assassination successor, President Theodore Roosevelt in 1901. The canal was completed in 1914.
US consumer demand for exclusive, stylish and elegant European textiles and fashion predates the Civil War of 1861, as exemplified by Brooks Bros, (established 1818), and continued throughout the 20th century by Paul Stuart, J Press, J Crew and of course Ralph Lauren, whose early attempts to impose cowboy boots and denim on upwardly mobile denizens of east coast cities were ultimately doomed, as ‘Ivy League’ and ‘preppy’ entered the fashion lexicon in the garment district showrooms of New York’s 6th (men’s wear) and 7th (women’s wear) Avenues in the early 1980s.
Unfortunately, or perhaps fortuitously, there were few local woollen and worsted mills of sufficient note in the US to supply suitable fabric for the level of sophistication the flourishing Madison Avenue brands required. This led to a post war surge in fabric imports, principally from UK and Italy, a trend that continues to this day, albeit via a different route.
The rise in demand for ‘designed’ fabric as opposed to blue and grey plain weave worsted, produced by the likes of Burlington Industries in Burlington North Carolina sent shock waves through the hitherto complacent domestic textile industry, basking in the belief they were eternally protected by the God fearing Senators and Representatives of the Bible Belt south of the Mason-Dixon Line.
One such champion of America First in the early days of emerging globalisation of the garment industry was Jesse Helms, Republican Chairman of the US Senate’s Foreign Relations Committee (1995 – 2001) and hailed as protector of US textile manufacturing in the Carolinas and beyond. Helms, as an opponent of 1960s Civil Rights legislation and a proponent of the view that AIDS was God’s punishment meted out to gays, never really endeared himself to the growing US fashion industry, based predominantly in New York that was lobbying for duty free access to foreign fabrics. Helms opposed any lowering of tariffs and was responsible for maintaining a +38% ad val duty on woollen and worsted cloth, a regime that remained in place until much of US clothing manufacturing was forced off shore, the posh brands to Canada under the North Atlantic Free Trade Agreement (NAFTA), the polyester trash to China, a classic own goal scored by Helms and his acolytes.
Questions currently being asked by the trade centre around what can the Trump Administration do that will not trigger a ‘McKinley backlash’ in the USA of today that imports around 92% of its clothing needs, principally from China. A +10 % duty added to basic tat imported from China would not go down particularly well with size 3X customers in Walmart.
Whilst fabric imported from UK, EU and several other countries now attracts +7% ad value duty (higher for superfine cloths), little is consigned directly to US ports, with the exception of cut lengths for domestically tailored clothing and fabric for the growing interior textile business.
However, as a significant amount of woollen and worsted yarn and fabric is shipped directly to Canada and Mexico for knitting, cutting and sewing, the +25% increase in duty Trump has threatened to slap on goods from America’s two close neighbours is a cause for concern, particularly as apparel goods crossing the border from Canada were valued at around US$1.67 billion in 2023.
The leading North American operator in the tailored apparel sector is Peerless in Montreal, a company set up in 1919, and since free market access across the 49th parallel into the USA under NAFTA was established on January 1st 1989, more than 6m tailored garments per year currently cross from Quebec into Vermont without let or hindrance from Peerless’ factories and depots.
US Retail leaders in recent days have been reticent in commenting directly on Trump’s tariff threats, preferring to keep their counsel pending further clarification in the hope that the ‘bark is worse than the bite’. The guarded view in the garment industry in the USA, Canada and Mexico centres around a theory that, as there is now little local US industry to left to protect, tariffs hikes will only antagonise the electorate, a result that initially eluded McKinley over 125 years ago’.
R. Peter Ackroyd, 25/01/25