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Note, the following model is very stylized since I can't capture all the nuance in a Twitter thread. But the info was given to me by the Senior VP of a major US suit factory, who also happens to serve as the president of a trade organization for clothing designers and executives.
There are three ways to make a suit: fully fused, half canvassed, and fully canvassed (in ascending order of quality). Let's assuming for this model that the suit is designed in the United States and manufactured in China, then imported into the US for sale.
So, how much does it cost to make a fully fused suit in China? We can estimate the costs to be:
— Labor: $10
— Fabric: $105
— Trims: $30
This is what it costs the factory ($145). The factory needs to make a profit, and in this industry, they typically operate on a 40% gross margin. Which means they markup the garment by 66.67%.
So they sell the suit to the US brand for $242. Once paid, it goes on a ship.
When the ship arrives in the US, the government sees there there's a suit arriving from China. Consequently, they impose a 25% tariff (this is the actual number). The entity who pays this cost is the US brand. On a $242 suit, that means paying $61 in taxes to the US government.
Now the US brand's total cost (manufacturing + import duty) is $303. Of course, they also need to make a profit. Brands commonly have a 60% gross margin, which means they markup the suit by 150%. The import tax is then passed onto the consumer.
That means you, the consumer, pay $758 for a fully fused suit made in China.
But what if the US government didn't impose any tariff? Well, then the brand would only pay $242, and the retail price would be $605. Hence, the consumer saves $153.
Let's quickly run through the other types of suits. For a half-canvassed suit, a factory will typically pay:
— Labor: $20
— Fabric: $105
— Trims: $30
The factory's manufacturing cost is $155, which means they sell it to the US brand for $258. The brand then pays $65 for import duty, and the resulting retail price is $809.
If there were no tariff, the retail price would be $645, so a savings of $164 to the consumer.
And what about the highest end? A fully canvassed suit? Well, a Chinese factory can expect to pay:
— Labor: $94
— Fabric: $105
— Trims: $30
Again, the factory's manufacturing cost is $229, which means they sell it to the US brand for $382. The brand then pays $96 for import duty, and the resulting retail price is $1,195
If there were no tariff, the retail price would be $955, so a savings of $240 to the consumer.
Of course, the point of these import duties is to make it more expensive for US brands to manufacture abroad. As JD Vance noted in an interview, people who impose these taxes are hoping to discourage US brands from using overseas factories, and thus hire Americans.
There's a lot of debate over whether this works. US suit manufacturing is undeniably a shell of its former self. And it's notable that the people who work in these factories are typically first-generation immigrants from Latin, Asian, and Afro-Caribbean countries.
There's a very simple reason for this: native born Americans often think garment manufacturing jobs are beneath them. And in any case, many don't even know how to sew. Immigrants often arrive here with sewing skills they learned back home.
I personally don't care where things are made, as I am not a nationalist. I only care that workers are treated fairly (e.g., labor protections, fair pay, etc).
However, I do question whether people are honestly willing to pay what it costs to make clothes in the US.
When Bikers for Trump went around searching for someone to make their pro-Trump t-shirts, they said paying just $8 more for a US-made t-shirt would be too much. They have good reason to believe this: most consumers are very price sensitive when it comes to clothing.
It was also recently discovered that Rudy Giuliani buys $10 polyester ties off Amazon, even though he could have bought a made-in-USA tie from Brooks Brothers for about $100. These were made in Queens, where he was once mayor. (I believe the factory is now closed)
Whether you think tariffs will bring back jobs or not, there are two undeniable facts: US brands pay the cost, and they typically pass the cost to consumers. With retail markups, the difference for a suit can be in the hundreds of dollars.
If you think inflation is bad now, tariffs will certainly make it worse.
Secondly, the end goal—to make consumers buy American—is available now. Clothes are still made in the US. You simply have to be willing to pay what it costs. Ask yourself: will you?
Gitman manufactures in the US and their shirts cost about $200. Imported shirts of far worse quality cost anywhere between $50-100. So for a $100 savings to US consumers, American trade policy is shuttering countless American clothing manufacturers. Is that what you’re saying?
Gitman shirts are closer to $250.
I agree that you can get an imported shirt for $50 to $100. I disagree that the imported shirt is necessarily worse in quality. In fact, imported garments are now often better than their US counterparts.
If demand shifted for made in usa, then more of these clothes would be made and costs would decrease.
costs here are largely determined by labor, and american labor will always cost more because we have to compete with rising wages in more productive sectors, such as tech.
“If the service is free, you pay with your private data.” - Edward Snowden
Snowden has been vocal about the dangers of data collection. He highlights that the real issue isn’t data protection but the sheer amount of data being collected by companies and governments. This data
Snowden has been vocal about the dangers of data collection. He highlights that the real issue isn’t data protection but the sheer amount of data being collected by companies and governments. This dataShow more
Tariffs may be aimed at other countries, but it’s your wallet that feels the pinch when you're buying that suit
You touched on one of the core problems of reshoring, skills. To rebuild a garment industry then you need skilled workers. Not just in factory manufacturing but also in retail.
I stopped buying suits when I ran out of stores that had an in-house tailor
Tariffs might target imports, but it’s the consumer who ends up footing the bill. That suit just got more expensive, thanks to politics
Will I need to declare my suits if I fly to Hong Kong, have them tailor-made, and wear them home on the flight back?
Great thread! To clarify, if that 25% tariff is the current number, do we know how Trump's proposal would change that tariff rate?
Any insights on the cost for an American made suit relative to an imported product with tariffs?
I realize that I'm in the minority here but I'll go out of my way to buy American made. Problem being not many normal consumer goods are.
There's a reason that conservative warriors like John Kennedy, Mike Pompeo, and President Trump have endorsed me to become the next US Senator from Michigan. From Day One, I'll work to secure our border, squash China, and strengthen our economy. Will you help me get there?
This is a superb analysis of how tariffs work.
He tried this before - Ask Harley Davidson about tariffs - the EU responded to an escalating trade war caused by Trump’s steel and aluminum tariffs in 2019. HD had to close some US manufacturing and move to Europe to avoid getting fleeced. Two sides can play at tariffs and trade
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Suits and all clothing was far better quality before we offshored it. We had tailors to make adjustments and repairs. We had cobblers fixing our high quality leather shoes. Offshoring gave us plastic fast fashion and overwhelming pollution.
The entire purpose of a tariff is to make the imported products more expensive than the domestic ones. When this happens, people who shop for the lowest price will then choose the domestic product.
The consumer generally pays more in the short term until people start realizing
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We need more hi-tech manufacturing in the US like building new Silicon chips with high margins.
It's not economical to create low-tech manufacturing jobs in the US due to cost structures.
It was my understanding that the Trump tariffs were very specific, I.e. cars, dishwashers, steel, etc. He’s trying to help factories here stay in business and not fold because they cannot compete!! I think buying American made is a good practice. Great thread!!
I read all of your posts. You're successful because you're incredibly talented and seem brilliant. But I'm not sure economics is your bag. You should know enough to understand the way it really works.
If a good is made in both China and the US, and the good is
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I like my presidents like I like my guns...
40 & 45 
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This is a great thread. What is absent is the price resistance of the consumer. That retail price for the suit likely will go on sale to move it, esp in an inflationary environment. The reduced margin to the retailer might be more than the tariff and in this case most definitely
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I like my presidents like I like my guns...
40 & 45
Use code TRUMP24 for 24% OFF!
Use code TRUMP24 for 24% OFF!
the kids in this thread should probably learn about 'de minimus' if you're giving a lesson on trade policy.
Hi, the unroll you asked for: threadreaderapp.com/thread/1833725 Share this if you think it's interesting. 
Stick with fashion critique, not fashion supply chain and trade analysis.
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HUNTSMAN 
@maphumanintent
Not mentioned in the thread - because it is a men's fashion critique account, not a trade or supply chain expert - is that it is a common practice for importers who are subject to tariffs (and those who aren't, honestly) to issue two commercial invoices.
1. A "true cost" invoice x.com/dieworkwear/st…
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: many who’ve commented on OP seem to think tariffs are either ‘bad’ or ‘good’, and may not have a working knowledge of the historical role of tariffs as a practical tool of international trade. PDF in page below is helpful.
The GOP is directing MILLIONS of dollars into our state to try to defeat Angela.
In a race this close, the amount of resources we have in our coffers now will truly make all the difference in November. Will you chip in $10 ASAP?
