How Made-in-America Brands Turn Tariff Turmoil Into Opportunity

When US President Donald Trump announced an onslaught of retaliatory tariffs earlier this month, it sent the fashion industry into a tailspin.

But for Bayard Winthrop, founder and chief executive of 14-year-old apparel basics maker American Giant, which produces its selection of tees, hoodies and sweatpants across a range of factories in the US including its own facility in North Carolina, it was a moment worth waiting for.

“For 40 years, we’ve been going after this unfettered globalised approach to trade, which I think has been really bad for the country … I’m generally a fan of efforts to address that,” said Winthrop, who also acknowledged that Trump’s tariffs created unwanted destabilisation in the near term. “It was a big part of why I started the company.”

American Giant is part of a small contingent of US-based labels that have long produced most, if not all, of their goods in the US and for whom the tariffs represent an opportunity, not an obstacle. The administration has positioned the tariffs as a means to revive domestic manufacturing, which has been on a steady decline for decades as brands have moved production overseas in an effort to cut costs. Last week, Trump delayed the highest increase in country-specific tariffs for 90 days, but duties in China, one of America’s biggest trading partners, remain above 100 percent.

With price hikes for clothing made overseas likely still on the horizon, brands that make their goods in the US are at an advantage. Not only are they less impacted by tariffs (although those that import materials from overseas are still vulnerable), they have a chance to promote a message that apparel manufacturing, a core part of their businesses, is still alive and well in the US — and that their products won’t be subject to massive price increases.

But it won’t be smooth sailing. Labels selling American-made fashion aren’t immune to deflated consumer sentiment as uncertainty around tariffs worsen recession fears. Also, many of these brands could see a dip in their international business as reciprocal tariffs threaten to roil global trade affairs. Knitwear brand Bleusalt, for example, is already seeing its sales in Canada drop 50 percent this year as customers in the region move to shop local brands, said Lyndie Benson, Bleusalt’s founder and chief executive. While spotlighting their made in the USA credentials can help sustain sales in the US, brands should also be wary of appearing to endorse the administration’s controversial policies. Target, which faced consumer backlash after following Trump’s lead earlier this year and rolling back its DEI programme, has logged ten straight weeks of declining foot traffic, according to data from analytics firm Placer.ai.

To successfully convince American shoppers to care about buying dresses and bags made in the US without being overtly political, American-made brands are highlighting the value of buying items made in the US, such as including their manufacturing process in their in-store experiences and partnering with like-minded labels.

“Those that have made the investment to figure out how to do all of that in the US, there is a compelling story behind that to help people understand the value chain,” said Brian Ehrig, a partner in the consumer practice of management consulting firm Kearney, “what it means to really make something in America.”

Only in America

Higher tariffs on imported goods likely won’t change the fact that producing clothes in the US is not a reality for most brands. The cost of materials and labour is significantly higher than regions such as China, Vietnam and Turkey, and there aren’t as many skilled people available to do the work.

But for the companies that can manage to source materials and manufacture here, there are ample benefits. Having suppliers and factories closer to home allows brands to make a smaller batch of items to start and then quickly ramp up production based on demand, rather than placing large orders overseas only to be stuck with a pile of inventory that may never sell.

“That’s actually what the promise of ‘made in America’ should really be about; being responsive to what consumers want and being really efficient with your inventory,” Ehrig said.

The benefits of local manufacturing are already coming in handy in an uncertain environment. When westernwear brand Filson launched a “Made in USA” page on its site in March, it saw an immediate spike in sales for that selection. So far this month, four of the top ten highest selling styles were made in the US, said Tim Bantle, Filson’s president. The company, which produces more than 30 percent of its products in the US at several factories, reopened a manufacturing facility in its Seattle headquarters where it currently produces three of its styles but will increase that number to six by the end of the year, Bantle added.

Brands that don’t make all of their products in the US have also started bringing more elements of their supply chain back home. Accessories maker Ghurka, for instance, has historically made around 90 percent of its leather bags, which retail for as much as $2,995, in boutique factories in the States, while producing its wine and watch cases in Italy. But last September, the brand started producing its wine cases in a factory in New York where it can better monitor quality control and save on freight costs and duties, said Robert Williams, Ghurka’s president.

Still, Ghurka doesn’t plan to move its entire supply chain back to the US anytime soon as the situation around tariffs continues to unfold, Williams added.

“We’re not being reactionary,” Williams said. “We’re in a pretty good position compared to 99 percent of the brands in the world.”

Spreading the Word

Because most consumers in the States don’t take manufacturing location into consideration when making a purchase, it’s usually smaller brands with a more niche audience that produce in the USA, said Sonia Lapinsky, partner, managing director and head of the fashion practice at consultancy AlixPartners.

But the tariff situation presents a moment for American-made labels to attract a wider consumer base by ramping up messaging about their history of making goods in the US, Lapinsky added.

Filson, for one, is organising walking tours of its Seattle manufacturing facility — located in the same building as its flagship store — so customers can see the Mackinaw wool and tin cloth materials the brand uses firsthand, Bantle said.

Others are highlighting how making products in the US sets them apart from competitors. Around 85 percent of the jewellery sold on online retailer At Present’s site is made by artisans in the US, which allows the company to offer one-of-a-kind pieces from a $250 mixed pearl collar to a $350 gold ear puff, said Marc Bridge, At Present’s founder and chief executive. The retailer prominently features those artisans on its e-commerce storefront through its “designer to know” link on its homepage.

Simply putting an American flag on its site “is less interesting than let’s tell the emotional story behind the actual people that were making it,” Bridge said.

There’s also a chance for these brands to lend their know-how to bigger labels that might be interested in exploring American manufacturing in exchange for benefitting from their wider reach. Last July, American Giant created a line of $13 t-shirts made with 100 percent locally sourced cotton for Walmart as part of the retail giant’s programme to sell more domestically-made clothing. The brand is currently working with another large American brand on a similar collection, Winthrop said, although he couldn’t disclose the partner.

“What I hope happens is … brands realise this is actually an opportunity to lead and not feel like we’re panicking or getting browbeaten into something,” Winthrop said. “We’re proactively taking a stand here because we agree, not with the tactics of the administration maybe, but with the objective and we want to be in support of the objectives.”