Trump’s Tariffs: The Hot-button Topic at AAFA Executive Summit in D.C.
“Trump’s tariffs” were a hot topic among apparel and shoe executives at this week’s American Apparel & Footwear Association Executive Summit in Washington, D.C.
AAFA president and chief executive officer Steve Lamar kicked off the summit with remarks calling out the confusion these tariff policies have created among the industry.
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“We’ve all had these conversations about how the chaos, the uncertainty and the whiplash are making it impossible to plan and execute with any level of confidence,” Lamar said in his speech on Wednesday. “I hear you and agree. But what if we can harness the tariff conversation so it becomes more about creating negotiated outcomes around which smart sourcing and responsible manufacturing operations can occur?”
The AAFA CEO went on to say that while the tariffs could end up improving some parts of the industry — such as promoting domestic manufacturing — they are, at the end of the day, taxes that consumers eventually have to pay.
“To be clear, we cannot shy away from reminding policymakers that tariffs are taxes that are paid by the U.S. importer and that these costs have been historically passed on to the ultimate consumer,” Lamar added. “But I believe there is a way through these curves so that smart tariff approaches can actually jumpstart a U.S. trade policy that has been moribund for too long.”
His remarks follow weeks of uncertainty on which goods from which countries will receive extra tariffs when imported in the U.S. As of Thursday, President Donald Trump has deferred duties on Mexico and Canadian goods covered under the U.S. Mexico Canada Agreement — including an array of footwear, apparel and textile products — until April 2.
Fashion executives shared their concerns during this week’s summit as well. In a keynote address, Tapestry Inc. CEO Joanne Crevoiserat said fashion companies have to be ready to operate in an industry and world that is endlessly evolving.
“What I’m talking about is playing offense in a landscape that is constantly changing,” Crevoiserat said. “How do we play offense into the change? The landscape is clearly just getting more dynamic and in order to execute well, we have to be able to navigate within a dynamic, changing landscape.
“We have to give our teams a roadmap and end goal so that they can execute in what is a crazy and ever-changing world,” she said.
Tapestry has seen plenty of its own change, starting with a corporate transformation that began just as the pandemic hit through to the $8.5 billion deal to buy competitor Capri Holdings that was tripped up by antitrust regulators and the agreement to sell Stuart Weitzman.
Now, like the rest of the corporate world, the parent to Coach and Kate Spade is also working to understand the corporate impact of trade wars.
“I don’t know where tariffs are going tomorrow,” Crevoiserat said. “I don’t know what might be Tweeted at 3 this afternoon. I worry also about how all of this change is impacting the consumer. Diversification in this environment is your friend. We have a diversified supply chain. Is it diverse enough? I don’t know.”
So the CEO stressed the importance of strong strategic partnerships.
“Building resilience in the supply chain is honestly, I think equally, equally as important as efficiency in our supply chain,” she said. “Many of us, for so long, were very focused on the most efficient answer. And over the last five years, I think it’s become quite clear that resilience and agility is equally important.”
Lamar told WWD in an interview that he is encouraging his members “not to take the bait” when it comes to the ever-changing trade policy happening inside the White House right now.
“Don’t make any rash irreversible decisions,” Lamar advised. “Don’t start trying to move and second guess where your supply chains are going to need to go, wait until the policies are clearer. Secondly, relentlessly communicate with your members of Congress and with administration officials. Make the case directly to the Trump administration and do it in a way that is not just critical, but that’s proactive.”
Lamar added that companies should make sure that they foster really strong strategic partnerships. “These partners, whether that’s product partners or supply chain partners, are the ones that you’re going to be on this journey with,” the executive said. “We’re on this journey together.”
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