On the open 15th floor of a loft building in Midtown Manhattan, about a dozen skilled workers make their way through piles of pants, stitching each piece together with focus and precision. Some of the items are designed by Outlier, a fashion brand that produces its smaller runs and experimental products with the garment district’s ecosystem of contract manufacturers.
It’s the kind of work that should get a boost from the stiff tariffs newly imposed on products entering the United States from nearly every other country. But the storeroom where Outlier keeps its fabric tells a more complicated story.
The rolls of cloth and boxes of recycled goose down come from Italy and Switzerland, Thailand and New Zealand, countries with specialized industries developed over generations that are unlikely to be recreated in America. Take the linen, made from flax grown in a coastal region stretching from northern France to the Netherlands.
“It would take a decade to get a crop growing,” said Tyler Clemens, Outlier’s co-founder. A linen shipment was headed for the cutting room; Mr. Clemens had just gotten the bill from the Department of Homeland Security with a charge labeled “IEEPA-RECIPROCAL,” after the International Emergency Economic Powers Act, one of the laws used to justify President Trump’s tariff measures.
Those levies will probably force Outlier to raise prices on its American-made garments. The increase won’t be as much as the raise on larger runs of finished clothing that the company imports from Portugal. But bumping up prices on an already premium product is likely to drive down orders, especially as consumers are dealing with increased costs for everything else. In the meantime, Outlier has frozen hiring, unsure of what lies ahead.
And moving more production to the United States? That would mean finding and training more people willing to spend long hours at a sewing machine, most of whom are currently immigrants who learned the trade at garment factories in China and Central America. It could also mean purchasing machinery that cuts fabric automatically. That kind of investment requires some confidence that the duties will be around for a while.
“If we know these tariffs are locked in, it’s going to suck, and it’s going to make everything more expensive, but we can deal with it on a certain level,” said Abe Burmeister, Mr. Clemens’s business partner. “But right now, it might change tomorrow. That level of chaos makes it way harder to do business.”
Mr. Burmeister’s skepticism, voiced on Monday, was merited. On Wednesday, Mr. Trump’s announcement pausing reciprocal tariffs blew a hole in the case to uproot supply chains overseas and reel them into the United States. And yet the remaining 10 percent universal tariffs will still make imported garments more expensive, without doing much to help the tiny industry that makes them here.
Apparel is the paradigmatic example of a product that the United States once produced in vast quantities and has almost completely lost to the rest of the world.
Only 2 percent of the clothing Americans buy is cut and sewn domestically. About half of that is made for the military, which is required by law to use U.S. manufacturers. The apparel manufacturing industry employs 84,000 people, down from 938,000 in 1990, according to the Bureau of Labor Statistics; it includes 6,619 establishments, down from 15,622 in 2001.
That’s partly why Mr. Trump’s new tariffs — which add to existing duties on clothing, averaging 12.6 percent — will hit Americans’ clothing budgets hard.
Most U.S. clothing manufacturers focus on specialized, high-value products targeted at consumers willing to pay substantially more than the typical price of a foreign-produced item. One such company is Hamilton Shirts, based in Houston, which has made men’s wear in America since 1883. It mostly uses Italian fabric, and dress shirts start at $245.
The company’s main cost, however, is its 41-member staff. David Hamilton, its fourth-generation co-owner, says that as long as foreign producers can pay workers only a few dollars an hour, tariffs won’t help much.
“We pay everybody livable wages, they have access to a 401(k) plan and health insurance, and who knows what happens in factories in other countries,” Mr. Hamilton said. He wishes the treaty that governs trade in North America included a minimum wage for garment workers, as it does for autoworkers.
Another men’s wear entrepreneur, Todd Shelton, proposed that tariffs on imported clothing be used to support wage subsidies on the order of $8 an hour for U.S. apparel production workers. “That’s the only way I see tariffs helping U.S. apparel manufacturing,” said Mr. Shelton, who produces a high-end clothing line bearing his name in East Rutherford, N.J.
The other strategy that U.S. apparel manufacturers pursue to keep costs down is limiting the range of offerings. Karen Kane, a women’s clothing line based in Los Angeles, has long made use of the city’s network of garment factories. Those facilities could handle the pandemic-era boom in loungewear, which is relatively easy to sew together. But Michael Kane, the company’s president, doesn’t know where he could produce anything with complex beading, embroidery or weaving, like sweaters, in the United States at a commercial scale.
“We would love to make more here in the U.S.,” Mr. Kane said. “The challenge is finding a way to make it economically viable.”
Some manufacturers do source all of their cloth and other components domestically, and some are insulated from tariffs. That doesn’t mean they’re celebrating.
For the past decade, the most prominent evangelist of U.S.-made apparel has been Bayard Winthrop, chief executive of American Giant, which produces casual wardrobe staples made from cotton grown, woven and sewn in North Carolina. A partnership with Walmart gave him the time, scale and certainty needed to figure out how to make a T-shirt that could retail for $12.98. He thinks tariffs could play a similar role, if applied judiciously.
That’s not how Mr. Trump has used his vast power over the terms of trade.
“It’s feeling a little too chaotic and poorly explained,” Mr. Winthrop said. “When you do things like that, you create an environment where both capital markets and supply chain participants freeze in uncertainty, and that can be really bad.”
There is some capacity for new production. Joseph Ferrara was looking forward to high tariffs, having just moved his cut-and-sew business from Manhattan’s garment district to a larger facility in Queens with $25 million in renovations and new equipment. But he knows that new orders depend on designers having confidence that producing overseas is going to be more expensive for a long while.
“When I talk to my clients and industry colleagues, their first reaction is: ‘Is this for real? Is this short term?’” Mr. Ferrara said. “If we get clarity that it’s a moving target and it’s fluid, I don’t think it’s a good signal to send out.”
The most immediate risk for U.S.-made brands is that economic gyrations prompt customers to pull back and keep their worn clothing or shop vintage rather than buying afresh.
Joe Van Deman, a former product manager at Google, has over the last few years purchased three apparel companies with manufacturing operations in the United States. One of them, Vermont Flannel, still buys its cloth from Portugal; Mr. Van Deman is working with a North Carolina factory to produce it domestically.
It’s a more expensive flannel shirt than one might get from Eddie Bauer or L.L. Bean. Even if tariffs increase the price of the foreign-made shirt more than the U.S. one, a nice shirt is still a discretionary purchase.
“If tariffs cause the cost of commodities to increase, we’ll likely see consumers tighten their belts,” Mr. Van Deman said. “They’ll limit their spending to food and other necessities and will be less likely to spend on clothing and gifts that might be seen as less essential.”
At the same time, other policies could nurture the domestic apparel manufacturing supply chain. For example, while industry associations differ on the effectiveness of tariffs in helping domestic producers, they agree that the federal government could purchase more of its goods from U.S. suppliers. The Defense Department is already required to do so by the World War II-era Berry Amendment, but military purchasing is dominated by prison labor.
Steve Lamar is president and chief executive of the American Apparel and Footwear Association, which represents both domestic and global clothing producers. He favors getting rid of prison labor and strengthening American-made purchasing requirements across the government.
“What are we doing to promote more manufacturing?” Mr. Lamar asked. “We have better tools that would be much more effective at doing that. This president likes tariffs. What’s the old adage — if all you have is a hammer, everything looks like a nail.”
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