Apr. 8, 2025 "Apparel brands grappling with 'tariff hell,' says Canadian industry group": Today I found this article by Paula Duhatschek on CBC:
Canadian fashion brands are grappling with the impact of Washington's steep new tariffs on garment-making hubs like China, India and Vietnam.
"One of my members called this 'tariff hell,'" said Bob Kirke, executive director of the Canadian Apparel Federation.
Retail groups in the U.S. have similarly warned that tariffs on Asian countries, where most American clothing is manufactured, will mean a steep uptick in prices ahead of the back-to-school season.
While the Canadian apparel sector wasn't targeted directly by the tariffs,
many companies headquartered here
make their products overseas
and sell to customers south of the border.
Canadian retail giants like
Aritzia,
Lululemon
and Gildan
saw their stock tumble after the tariffs were announced last week by U.S. President Donald Trump.
Access to the U.S. market is critical for brands in this country if they hope to grow past a certain point,
says Emma May, founder of the Calgary-based womenswear brand Sophie Grace.
"The U.S. market's amazing, it's huge," said May, who has customers on both sides of the border.
"We solve the same problem for the U.S. customer that we solve for a Canadian customer and there are 10 [times as many] of them."
But May is starting to reconsider some of her U.S. expansion plans.
Her clothes are made in China
and warehoused in Canada,
where they are shipped to U.S. e-commerce customers.
On top of an additional 34 per cent tariff on Chinese goods imposed last week, the White House has also said a previous exemption, that allowed small orders from China into the U.S. without tariffs, is closing.
"Maybe the U.S. market is just not something we can go at because our products will end up being just far too expensive for that customer," said May.
It's unlikely the U.S. will allow loopholes for Chinese-made products
that make a pit stop in Canada
before being sold in the U.S.,
says trade lawyer John Boscariol.
The Trump administration "is trying to close up any loophole or potential exemption," said Boscariol, a partner with McCarthy Tetrault in Toronto.
And while clothing is a prime example, Boscariol says many Canadian businesses are likely dealing with the same problem.
"Whether you're in clothing, apparel items, toys, whatever... whether that's China, Vietnam or any other country in Asia that's now been targeted with very significant tariffs, you're going to be impacted by this in terms of your access to the U.S. market."
Why not change factories?
Jeremy Oldland, co-owner of the Montreal kids clothing company Hatley, manufactures his products in China and India.
He supplies pint-sized rain boots, pajamas and jackets to department stores, boutiques and e-commerce customers south of the border.
U.S. sales make up about half his revenue, says Oldland,
and he expects that imposing a new surcharge on all those orders will spur a wave of cancellations.
"We're going to sell less product. It's going to hurt any way you do it," he said.
And yet shifting supply chains out of Asia to North America would be difficult.
"We don't have
the tradesmanship,
the craftsmanship,
we don't have the printing techniques,
we don't have a lot of things [in Canada]."
Kirke, with the apparel federation, says the new tariffs are hitting the industry particularly hard because they seem to come out of left field.
In recent years, growing trade tensions between the U.S. and China have prompted some larger retailers to start shifting production outside of that country,
a move that was also driven in part by reports of forced labour in China's Xinjiang region.
But now, the U.S. is also going after smaller manufacturing hubs like Vietnam, Cambodia and Bangladesh, where companies had previously been trying to diversify their production.
"That's a hard, hard thing to deal with," said Kirke.
Kirke says he is glad that the U.S. tariffs don't hit Canadian-made products, though this is a relatively small portion of the total industry.
The hope, he says, is that Trump will change course and back down on his tariff policy.
As for May, with the brand Sophie Grace, she hopes to continue growing her business — but with an emphasis on customers north of the border.
"We will obviously be looking to retrench in the Canadian market and then also explore other markets like Australia and Europe," she said.
https://www.cbc.ca/news/canada/calgary/tariffs-canada-clothing-china-vietnam-1.7504380
Apr. 15, 2025 "Clothing companies fear Trump tariffs will leave them worse for wear": Today I found this article by Tara Deschamps on BNN Bloomberg:
Most of the time, her hunt ends in disappointment.
“It’s a lot of uncertainty at the moment,” said Kharey, a Calgary-based designer who runs
luxury womenswear line Nonie
and workwear brand Folds.
“I wake up every day right now with anxiety.”
The refrain is similar across the fashion industry because of its global nature:
material,
buttons,
zippers
and more often zig-zag across tariff-targeted Asia
before being turned into garments there
or sent on to North America.
The web like nature of apparel supply chains can leave Canadian brands dinged by tariffs if they ship goods from foreign partners directly into the U.S. for manufacturing or distribution.
In addition to Canada, Trump has imposed tariffs on most other countries including European fashion meccas France and Italy
as well as places with low labour costs and easy access to textiles such as
Bangladesh,
Cambodia,
India,
Indonesia,
Malaysia,
Pakistan,
Turkey
and Vietnam.
Most of these countries were whacked with varying double-digit tariffs before recently receiving a 90-day reprieve and instead being hit with a 10 per cent duty, at least temporarily.
Clothing production powerhouse China has been subject to a 145 per cent tariff from the U.S., which was not lifted,
and lobbed a 125 per cent levy back.
“I have many colleagues that are in the fashion industry, and so many of them do get their products made in China and it’s really difficult to hear their struggles,” said Kharey.
“The bigger guys, they’ll figure out a way to get through this.
It’ll be hard for them, but it’s the small businesses right now where it almost feels like they’re like pawns.”
Daniel Baer, a partner at consulting firm EY Canada focused on retail, said apparel companies of all sizes with products passing through countries ensnared by tariffs are doing whatever they can to cope.
For many, that means rethinking
where they source components from,
where they manufacture clothing
and what route products take to make it to shoppers.
“But these types of changes are not changes you can do on the flick of a switch or do overnight,” he warned.
Kharey knows rerouting production is time-consuming because Folds recently moved production from Canada to Tunisia, which was subject to a 28 per cent tariff from the U.S. until Trump put a 90-day pause on the duty and replaced it with a 10 per cent charge.
Even though shipping from Tunisia to Canada is not impacted by those tariffs, Kharey imagines Folds won’t be unscathed.
“The costs in Tunisia probably will go up, especially since one of their biggest main exports is textiles, and that’s where we are,” Kharey said.
“We have to juggle,
do we leave our pricing where it is and see how this goes
or increase our pricing?”
For now, she’s not hiking prices.
Neither is Hayley Elsaesser, a Canadian fashion designer who runs a self-named label.
The company is “doing everything we can to avoid” raising prices,
because with “inflation and the rising cost of living,
it’s something that affects our customers deeply, and we’re always mindful of that,”
she said in an email.
Baer thinks apparel brands coping with the trade tensions will eventually have to pass on the costs of the tariff war to consumers, especially if Trump follows through with his promise to remove the de minimis exemption on May 2. The legal mechanism allows many goods valued at or under $800 to enter the U.S. without paying duties.
Many clothiers have staved off immediate increases because their spring and summer inventory is already in hand and they’re placing orders for fall.
That could mean higher prices will hit just in time for back-to-school shopping, Baer said.
By then, consumers’ ability to spend may be even lower than it is now.
Its current, depressed level is a worry for Elsaesser, who called it the “biggest impact” her business is seeing.
“We have customers all over the world, and there’s a lot of concern and uncertainty about how things are changing,” she said.
When consumer confidence dips, Baer said shoppers tend to trade down to
more affordable brands,
seek more discounts
or go without discretionary purchases altogether.
While parents may not have the option of avoiding purchases for kids outgrowing their clothing,
adults may decide to stick with what’s already in their closet for several more seasons,
weighing on retailers.
“Can I wear this jacket two or three or four more seasons? For sure, I could,” Baer offered as an example.
“Would I like to wear two or three or four more seasons? No, because it will be out of fashion ... but nothing will prevent me from doing that because it is discretionary.”
This report by The Canadian Press was first published April 15, 2025.
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