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Trump’s ‘Nightmare’ China Tariffs Could Destroy the U.S. Bridal Gown Industry

June 19, 2019, 9:44 PM UTC

U.S. bridal gown designers and retailers are saying “I don’t” to President Donald Trump’s ongoing trade war with China, arguing his latest call for tariffs on Chinese imports will devastate the $2 billion industry.

Trump’s proposed 25% tariff hit list on $200 billion of Chinese imports includes silk and other materials used to make wedding dresses.

“Suddenly raising tariffs to 25% is like a heroin overdose,” Stephen Lang, owner of New Jersey-based Mon Cheri Bridals, tells Fortune.

Lang testified to his concerns Wednesday at the third day of hearings before the U.S. Trade Representative, joining other business leaders. “It will wipe us out completely. My industry could be out of business in a year. I will lose my home and all my assets,” Lang said.

Instead of spending his pre-retirement years transferring ownership of Mon Cheri to his 100 employees—most of whom are women and with the company since its 1991 founding—Lang, 65, is calculating how to save a successful gown production and importing business.

“I never was up at night worrying about competition, and now I’m looking at my own government putting me out of business,” he said.

Reliance on China

U.S. companies relying on Chinese imports are numerous, from retailers of various goods to manufacturers that rely on components. Among business officials testifying before the USTR this week, are those from the bicycle, underwear, jewelry, electronics, lighting, and footwear industries. Of particular note, footwear maker New Balance withdrew its previous support of the president’s China trade policies.

Bridal designers, manufacturers, and shop owners argue wedding dress makers, who already pay a 16% duty, are particularly at risk—even if the gowns are made in America because fabric and other materials often come from China.

As a designer, I’ve always been passionate of keeping labor inside the U.S. as much as possible and supporting local textiles,” says Rebecca Schoneveld, who sells her own and like-minded designers’ lines of handcrafted gowns at her Brooklyn-based shop Schone Bride. “But specialty fabric, trims, and silks—most of those don’t exist in the U.S. We don’t have silk worms or mulberry trees. The Silk Road is called the Silk Road for a reason.”

And although she’s planning on relying on other material in future collections, what of her pre-existing six years of dress designs?

“We aren’t making designs where we can rapidly change for tariffs,” Schoneveld tells Fortune. “And it’s important to us that our brides don’t get something that looks different.”

Likewise, Lang, who relies on 49 Chinese factories for his gowns, said he can’t switch to another country for imports.

“If I was making socks, I could go to Bangladesh or India or the Caribbean,” said Lang. “But for bridal, I can’t get the material I need from anywhere but China. And there’s no way that these other countries would be able to absorb the production that this industry needs.”

Rising Prices

The timeline for wedding dress sales and production also create unique concerns. As Trump seeks to initiate another round of tariff increases on Chinese imports, businesses are already struggling to adjust to higher costs caused by his earlier tariff hikes.

“What’s weird about our industry is that brides pay for goods four to five months before they ship to us,” Ann Campeau, president of the National Bridal Retail Association and co-owner of five independent bridal shops, tells Fortune. “Now our goods are coming at higher price points, which the manufacturers have to absorb because they are contractually locked into that price.”

Although Campeau said many American manufacturers are now absorbing higher tariff costs rather than passing them on to some 6,400 independently owned bridal shops, this can’t fiscally be sustained in the long term.

“I think short term it won’t put my stores out of business,” she said, “but if I’m paying more, I buy fewer dresses so it will eventually affect manufacturers.”

In the debate over slapping additional tariffs on Chinese imports, the Trump administration asserts U.S. businesses benefit from the tariffs. However, it’s the opposite for U.S. importers of Chinese products.

“Tariffs are taxes paid by American consumers, not foreign countries,” said Bethany Aronhalt, a spokeswoman for the National Retail Federation. “If the administration’s latest tariff threat takes effect, just about every U.S. industry would take a hit, and the bridal industry is no exception. Everything from a bridal dress and the groom’s suit to jewelry, shoes, and wedding decor could cost more if the trade war escalates.”

As a result of the earlier Trump tariffs and possibility for more, Campeau wonders if her customers will be able to afford higher prices of already expensive gowns—an issue with which Schoneveld is grappling.

“Last week I had to go through our inventory. We had to raise prices,” she said. “There are some styles that cost $2,200, which now have to be sold at $2,800.”

And if American consumers can’t pay the difference, Lang said he’s worried they’ll turn to online counterfeits—often sourced from China—undoing much of the work his bridal association has accomplished to fight forgeries over six years, removing 30 million illegally used product photos and shutting down 3,000 counterfeit websites.

“Millennials and younger generations don’t always want to go out and buy a nice dress, they’d rather go on vacation,” he said. “So counterfeiters will take our intellectual property, put it on websites with our brand names for much less money, and customers think they’re getting the same thing while they’re usually getting cheap knockoffs.”

Ultimately, counterfeits could be perpetrated by the same Chinese manufacturers American bridal companies might no longer be able to use.

“If good factories can’t sell to us, they’ll sell to our counterfeiters,” Lang said. “If the tariffs are upheld, counterfeiters will come out of the woodwork again.”

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