AAFA President: Extremely High Tariffs Serve as Import Ban for Apparel and Footwear Importers

Excessively high tariffs can cause “production [to] grind to a halt, and that includes production in the United States,” AAFA President and CEO Stephen Lamar said on the podcast. “So, we’re facing some pretty strong problems and issues here, either inflationary or existential, dependent upon your product mix, where you are in the supply chain.”

Lamar was referring to tariff stacking on imported apparel goods from China and Hong Kong, which are facing duty rates in the range of 145% or even more amid tariffs under the International Emergency Economic Powers Act and Section 301 tariffs.

Member companies have been asking “for the pain to stop” by injecting more certainty and predictability back into the customs process, according to Lamar. He pointed to companies’ confusion over when imported goods from China may take advantage of a temporary in-transit exemption, and the lack of timely guidance on how to address that situation. CBP issued guidance on the subject the following day (see 2504300027).

“There are all these questions that keep getting asked, and they’re not answerable. And then if you make those announcements take effect immediately, then it’s really, really difficult to pivot supply chains. And I’m not even talking about moving supply chains, I’m talking about making sure your existing supply chain works,” Lamar said.

He continued, “What you normally want [is] to have, when you make an announcement about these things, some time where you can figure [it] out. … You go to some experts, people that really do this stuff on a daily basis, and figure out if it’s going to work, if you've missed something. But all this was done almost overnight, and that’s created a huge level of confusion and uncertainty.”

At a high level, what’s challenging with the tariffs is that there are conflicting messages about their purpose, including whether their main purpose is to raise money, promote U.S. manufacturing or increase diversification from China.

“Depending on how you look at any one of these tariffs, on any particular date, you’ll come away with a different answer, and that’s really difficult. It’s hard for me to tell my members that the administration wants more manufacturing to occur in the United States, when my manufacturing members are among those screaming the loudest because of the tariffs that are occurring,” and there are calls for retaliation by other countries, Lamar said. “It’s hard for me to tell my members diversify from China when the countries where that diversification should go to are also being penalized. It's hard for me to tell my members to build resilient supply chains and free trade agreements, which are these long-term, predictable partnerships we have with nearshoring countries, when they're getting targeted as well.”

If apparel and footwear manufacturing were to grow in the U.S. from its existing footprint, other federal measures beyond tariffs, such as the Berry Amendment, would be the tools responsible for spearheading that growth, according to Lamar.

“However, even if we were to unleash all of those policy tools, it would still take some time before we would quite literally be moving the needle… [to] where we're going to see more production on the margin,” Lamar said

Given that the materials that form a piece of apparel or footwear come from many different sources outside of the U.S., what could happen over the next 10-15 years is the development of a “robust, circular industry” using recycled fabric.

But “other things will make that happen. It won’t be tariffs,” Lamar said.