Canadian fashion brands are dealing with the impact of Washington’s New tariffs pronounced in garments such as China, India and Vietnam.
“One of my members called this ‘Hell of the Tarifa’,” said Bob Kirke, executive director of the Canadian Federation of Apoceis.
Retail groups in the United States have warned in a similar way that tariffs on Asian countries, where most American clothing is manufactured, will mean an increase in prices before Season Back to School.
While the Canadian clothing sector was not directly attacked by tariffs, many companies based here make their products abroad and sell to customers south of the border.
Canadian retail giants such as Aritzia, Lululemon and Gildan saw their stocks drop After the tariffs were announced last week by the president of the United States, Donald Trump.
Access to the US market is essential for brands in this country if they expect to grow beyond a certain point, says Emma May, founder of the Calgary women’s clothing brand, Sophie Grace.
“The US market is surprising, it is huge,” said May, who has clients on both sides of the border. “We solve the same problem for the American client that we solve for a Canadian client and there are 10 [times as many] of them “.
But May is beginning to reconsider some of its expansion plans in the United States.
His clothes are made in China and is stored in Canada, where they are sent to the United States electronic commerce clients. In addition to an additional 34 percent rate on Chinese products imposed last week, the White House has also said that a previous exemption, which allowed small orders from China to the United States without tariffs, is closing.
“Maybe the US market is not something we can do because our products will end up being too expensive for that customer,” said May.
It is unlikely that the United States allows lagoons of Chinese manufacturing products that make a boxes stop in Canada before being sold in the United States, says commercial lawyer John Boscariol.
The Trump administration “is trying to close any escape or potential exemption,” said Boscariol, a partner of McCarthy Tetrault in Toronto.
And although clothing is an excellent example, Boscariol says that many Canadian companies are probably dealing with the same problem.
“Whether it is in clothing, clothing items, toys, whatever … either China, Vietnam or any other Asia country that has now been attacked with very significant rates, will be affected by this in terms of access to the US market.”
Why not change factories?
Jeremy Oldland, co -owner of the children’s clothing company Montreal Hatley, manufactures its products in China and India. Supply rain boots the size of a pint, pajamas and jackets to department stores, boutiques and electronic commerce customers to the south of the border.
US sales represent approximately half of their income, says Oldland, and hopes that imposing a new surcharge in all those orders stimulate a wave of cancellations.
“We are going to sell less product. It will hurt in any way you do,” he said. And yet, changing Asia’s supply chains to North America would be difficult.
“We don’t have commercial comments, crafts, we don’t have printing techniques, we don’t have many things [in Canada]”
Kirke, with the Federation of Apparos, says that the new tariffs are hitting the industry particularly because they seem to leave the left field.
In recent years, the growing commercial tensions between the United States and China have led some bigger retailers to begin Changing production Out of that country, a measure that was also partly driven by forced labor reports in China Xinjiang region.
But now, the United States also chases the smallest manufacturing centers such as Vietnam, Cambodia and Bangladesh, where companies had been trying to diversify their production.
“That is something difficult and difficult to treat,” Kirke said.
Kirke says he is happy that US rates do not hit products made by Canadian, although this is a relatively small portion of the total industry.
The hope, he says, is that Trump will change the course and return to his tariff policy.
As for May, with the Sophie Grace brand, she hopes to continue growing her business, but with emphasis on customers north of the border.
“Obviously, we will seek to retain in the Canadian market and then also explore other markets such as Australia and Europe,” he said.
