As EPU hat is a cap manufacturer, we will also suffer from the final punishment of raising tariff of President Trump, who is leading a trading war against China.
Baseball cap is some way the icon of America, which is consumed about 50 or 60 millions pieces of baseball caps a year, and according to Bloomberg recording, 89% of these caps are produced in China, and imported into USA.
As the World Series gets underway on Tuesday with Game 1 of a coastal battle between the Boston Red Sox and the Los Angeles Dodgers, new tariffs imposed by the Trump administration mean many baseball fans could soon be paying as much as 25% more for their favorite team’s caps.
According to the American Headwear Alliance, which represents producers such as Massachusetts-based ’47 Brand and Indiana-based Lids, the vast majority of caps sold in the U.S. are imported from overseas. Of those, 89% came from China last year, said Jim Day, a spokesman for the alliance.
It has already been 10% added to baseball caps since September, while the situation may get worse. President want to issue more tariff on 200 billions of more goods from China. In his logical,
“Billions of dollars are, and will be, coming into United States coffers because of Tariffs,” Trump tweeted on Tuesday. “If a country won’t give us a fair Trade Deal, we will institute Tariffs on them. Used or not, jobs and businesses will be created. U.S. respected again!”
While, for my own poor wit, I can’t understand that at all, let’s figure something.
1, Don’t buy baseball caps, though they love their baseball team but they decided to support the American Made caps, the sales gets down. This is Government wanted result.
2, People buy local produced products, as local labor cost so high, One cap will be sold about $30-$40 dollars. Don’t remember the MAGA caps is $29.99. Oh that is what Mr. President want.
3, The brand owners, like NEW ERA, decided to build up factories, and make caps themselves, and finally they found that once upon a time, they can buy $1.50/pc from China manufactures, now, their production cost will be about $8~$10 dollars. and once they made like 10 times profit, while now, even raise prices, they can hardly make 100%.
4, Whatever, importers still buy caps from China, and they raise money, they still can make profit.
New Era Cap Situation
Like many other industries, ball cap makers are seeking an exclusion from the new tariffs, something the administration has already said will not be forthcoming for any product.
New Era Cap, which is the official supplier of headwear to Major League Baseball, said in a statement that all caps worn by Major League players on the field during games are manufactured in the U.S.
But the company does expect to be impacted by the tariffs more broadly, and that might involve shifting production rather than raising prices.
“Like many other U.S. companies, New Era Cap is continuing to evaluate the impact that the tariffs, which went into effect on September 24, are going to have on its headwear products, some of which are manufactured in China,” it said. “New Era maintains a robust global supply chain and sources product from a number of countries in addition to China.”
As a professional and long serving cap business person, I have to pointed out here is that, it is true that New Era has the above opinions, their biggest supplier, the Asian Sourcing International, have tried a lot of cooperation ways, like building factories in Cambodia, Dominica Republic, like 15 years ago, and those projects have been demonstrated to be failure.
One key reason is that the supply chain. From the fabric, accessories, sewing machines, embroidery machines, wash factory, machine maintenance technicians, experienced workers, logistic, environment protection law, all of the above, have woven up a big net, make every steps so closely tied with each other.
I have talked to several factories leaders, managers, bosses, they are not worried at all.
First, 10 years ago, Chinese factories were really relied on USA buyers, it is truly the buyers market. But nowadays, with the burst of the internet B2C market, the trend has changed.
Over 90% factories have built up their own brand, and they are selling to worldwide through all kinds of platforms, Amazon, Ebay, Aliexpress, DHGate, Lazada, Etsy, Wish, as you can name them.
And that is not all, they have built up USA localized companies, warehouse to sell these caps, and they are not imported from China. I don’t know if Mr. President can get this point, but I think he will, he is so smart and did a lot of same things himself, he is a truly business man.