Roughly 97% of all clothing for sale in American stores is made overseas, and most of those imported clothing items are made in China. Now, a new analysis breaks down exactly how much more Americans can expect to pay for basic clothing items if President Donald Trump’s tariffs remain in place.
CNBC reported Thursday on an analysis from financial services firm AlixPartners that estimated the cost of commonly purchased items that are subjected to the new trade duties Trump has imposed. One item the firm analyzed before and after Trump’s “Liberation Day” tariffs is the cost of a men’s cotton sweater manufactured in China.
According to AlixPartners, one sweater would cost roughly $6.80 to manufacture. And when including the already existing 41.2% tariff and duty rate, the cost of making the sweater and shipping it to the U.S. costs another $2.82, before adding on an additional $0.95 for logistics and sourcing costs. This means that sweater cost a total of $10.57 to source, manufacture, and ship to the United States. When adding on an estimated 65% markup for typical retail profit margins, that sweater would cost approximately $30.
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However, Trump’s new tariffs balloons that cost far beyond the original $30 retail price. When AlixPartners factored in the new 71.5% tariff and duty rate on Chinese goods, the cost of shipping to the United States went up from $2.82 to $4.86. That raises the price to make and ship the sweater from $10.57 to $12.61. And at the same 65% markup to maintain the same level of profitability, the cost of that sweater goes up from $30 to $35.80.
But CNBC reporter Courtney Reagan then pointed out that had the full April 2 “Liberation Day” tariffs been enforced, that same sweater would have cost even more. She added the additional 145% tariff to the existing 41.5% duty rate, to point out that the new 186.5% tariff would raise the cost of making and shipping the sweater to $20.43 per unit. And assuming the same markup, the full price of the sweater in an American store would jump to $57.97 per unit.
“That is an increase of 92.3% — almost double the original retail price,” Reagan said.
AlixPartners also found that the cost of a a pair of men’s shoes made in Vietnam would go up significantly under Trump’s new tariffs. When factoring in the full reciprocal tariff of 66% (a 46% “Liberation Day” tariff plus the current tariff and duty rate of 20%) the full retail price of a pair of shoes could jump from $95 per pair before the April 2 tariff to as much as $129.14.
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Click here to read CNBC’s full report. And watch the video of Reagan’s segment below, or by clicking this link.
