- Title: Why a major shift to US clothing production is unlikely
- Date: 13th March 2025
- Summary: NEWARK, NEW JERSEY, UNITED STATES (RECENT - MARCH 5, 2025) (REUTERS) VARIOUS OF EMPLOYEE USING SEWING MACHINE TO SEW LABEL ON SHIRT READING (English): "MADE IN USA / NOV 2024" AT GAMBERT MANUFACTURING LABEL READING (English): "MEL GAMBERT" OWNER AND CEO OF GAMBERT SHIRTMAKERS, MITCH GAMBERT, SPEAKING WITH EMPLOYEE (SOUNDBITE) (English) OWNER AND CEO OF GAMBERT SHIRTMAKERS,
- Embargoed:
- Keywords: Gambert Trump manufacturing tariffs
- Location: VARIOUS
- City: VARIOUS
- Country: US
- Topics: North America,Government/Politics,International Trade
- Reuters ID: LVA001837012032025RP1
- Aspect Ratio: 16:9
- Story Text: President Donald Trump's Made in America push is prompting some U.S. clothing retailers to expand domestic production of everything from T-shirts to coats and suits, several executives told Reuters this week.
But limited capacity makes a large-scale shift to U.S. production unlikely, and American-made clothing comes at higher cost because of elevated labor expense and tariffs on materials, the executives said.
In a meeting with American CEOs on Tuesday (March 11), including the head of Walmart, Trump repeated his vow to cut the 21% corporate tax rate to 15% for U.S. companies making products in the U.S., according to a person familiar with his remarks. He also defended his use of tariffs on imports and said they could multiply.
"Over the last, probably, six months since November simply, we've definitely gotten a lot more interest in domestic production," said Mitch Gambert, owner and chief executive of Gambert Shirtmakers, a manufacturer of men's dress shirts in Newark, New Jersey. "It certainly seems to be a hot topic in the industry."
However, he also expressed concerns about scaling the business while maintaining the quality that their existing customers have come to expect.
"We certainly don't want to overload it and kick out the existing customer base that has been steady with us," he added.
His firm supplies woven cotton button-up shirts to three Nordstrom stores, and the department store chain has asked him to boost that to 50 stores by the end of June, he said. Nordstrom did not reply to a request for comment.
Joe Ferrara, CEO of New York-based Ferrara Manufacturing, which makes clothing for Ralph Lauren and the U.S. military, said more retailers have approached him to test small-batch, quick-turnaround manufacturing of products such as wool coats and blazers. Ralph Lauren did not immediately respond to a request for comment.
Steve Lamar, president of the American Apparel and Footwear Association, said in a February statement that the industry group was concerned about the sweeping tariffs and "instead puts America last, raising costs for American manufacturers for critical inputs and materials, closing key markets for American farmers, and raising prices for hardworking American families."
CHEAP IMPORTS
Americans are accustomed to buying low-priced China- and Asia-made clothing. About 97% of the clothes and shoes sold in the U.S. are imported, according to Lamar's association. China is the biggest source of U.S. apparel imports, though its share has fallen over the past 15 years as clothing production in Vietnam and Bangladesh grew.
Gambert's main competitors are shirt factories in China, Indonesia, Malaysia, Vietnam and India. Another problem is that materials such as buttons, cloth and zippers are imported and subject to Trump's tariffs. China is the biggest source of U.S. fabric imports. Gambert's button costs have increased 18% because of U.S. tariffs against China.
The U.S. clothing manufacturing sector has shrunk since 1990 as brands and retailers shifted to sourcing from factories in China, Vietnam, Bangladesh and other low-wage countries, enabling them to keep costs and prices down, according to a report released in February by research website supporting U.S. manufacturing, AllAmerican.org.
"Only about 2.5% of apparel purchased in the U.S. is domestically produced," according to the report. "American apparel manufacturing jobs have declined sharply, from over 900,000 in 1990 to fewer than 100,000 today. The primary reason for this decline is the cost differential between American and overseas labor, which is a common theme across all manufacturing industries. While the average hourly wage for an American apparel worker is approximately $15-$20, workers in Bangladesh and Vietnam often earn less than $1 per hour. This wage gap, combined with lower regulatory costs abroad, has incentivized companies to offshore production."
For Gambert, about 90% of the 100 workers in his factory earn more than New Jersey's $15.49 hourly minimum wage.
"The issue with the labor rates is that every time there's an increase on a state level, if somebody is making the minimum wage and they go up $0.50, somebody that's making $21 expects to go up $0.50 as well," he said. "Labor is certainly an issue."
"We live and die by the cost sheet, which means how much does it cost to make a jacket, a fine tailored jacket? And when we look at manufacturing inputs, there are two main inputs - the first input is labor, the second input is materials - 70% of what we make here is labor, 30% is material," said Ferrara in January. He supports Trump's additional tariffs.
Kim Glas, president of the National Council of Textile Organizations, also favors Trump's additional tariffs on apparel imports from China. But she said tariffs on Mexico and Canada hurt the industry that relies on sending U.S. cotton and wool, yarn, and fabric across borders for different stages of manufacturing and urged a "more measured approach as well as a negotiated solution that at the very least exempts qualifying USMCA (United States-Mexico-Canada Agreement) goods from penalty tariffs and closes the de minimis (merchandise with a value totaling less than $800 is allowed to enter the country duty-free and with minimal inspections) loophole once and for all."
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