Tariffs and the Cost of Quilting

Have you paid any attention to the new tariffs imposed on goods imported to the US? I’ll tell the truth: there is so much chaos in the political news all the time, I haven’t keyed in on this as much as I should. However, yesterday I saw two articles on the tariffs and the cost of quilting. The issue in total is worth understanding better, and if this is our entry into that understanding, so be it.

The first item to clear up is the term “tariff.” A tariff is a tax or duty paid on a class of imported goods. (Alternately, it could be imposed on goods being exported, to be paid before they leave the country.) The importer pays the tariff. If the importer re-sells that good directly, they will need to increase the price at which they sell, in order to recoup the expense of the tariff. If they don’t increase the price, their profit will be reduced or wiped out. If the importer is a manufacturer, they may be able to cut costs elsewhere to reduce the impact of the tariff. However, that will have a different effect, perhaps on the other suppliers they buy from, or on labor, or on the end buyer of their goods.

In July, the Trump administration announced that new tariffs would be imposed on the import of $34 billion of Chinese goods coming into the US. The intention was to make Chinese goods more expensive for American consumers, so we would import less Chinese product as compared to the amount of US product we export to China. In addition, American businesses would theoretically be “protected” from foreign competition, allowing them to increase their sales.

A trade deficit is the amount by which a country’s imports exceed its exports. According to the US Census Bureau, at the end of June, the US had a trade deficit with China of $185.7 billion for the year to date. In other words, we imported $185.7 billion more from China than we exported to China so far in 2018. In 2017, it was more than $375 billion for the year as a whole.

So far, that sounds reasonable, right? If we want a different balance of trade, we should (preferably) export more, and possibly import less. Tariffs would be a good way to import less. (There are a lot of economic reasons this may or may not make sense at all. Way beyond the scope of this little post.)

The hitch in this plan comes in with retaliation and escalation. As soon as the tariffs were announced, China declared their own set of tariffs on incoming American goods. And in return, trump has set in motion more tariffs against China, as well as new ones against Canada, Mexico, the European Union, and Japan. A wide range of goods from all over the world will be more expensive for Americans.

So how does this all affect the quilting industry? After August 30, another $200 billion of Chinese goods will be subject to tariffs that could be from 10-25% of value. In 2017, the US imported $6 billion worth of fabric of all types. Not all of that was from China, but from what I can gather (a variety of somewhat confusing sources,) about 30% of woven cottons are from China.

It is reasonable to assume that the prices we pay for fabric will go up, on average. Fabric companies will have to cover the tariffs as they import, and that cost will need to be covered by the consumer to maintain their profits. Small retailers (local quilt stores) may not be able to pass on the price increases to their own customers, which could lead to more shops leaving business.

In addition, textile machinery, including sewing machines not made in America, may have increased prices. (Which “domestic” or regular sewing machines are actually made in America these days? Any?) Tariffs on goods coming from the European Union and Japan might hit that market. Parts for repair of your older machine could face the same hurdles. Many gadgets and notions are made in China and may have higher prices, too.

I don’t have the answers on this, but I advise you to pay attention. Some retailers, including JoAnn Fabrics and Dharma Trading Co. have already notified customers that tariffs may affect pricing.

Here are the two articles I saw yesterday. One is from craft industry expert and reporter, Abby Glassenberg. Mostly, it explains that she is researching the issue and will be reporting on it soon. Sign up for her newsletter for notification on this concern, as well as other great stuff on the craft world.

https://whileshenaps.com/2018/08/on-embracing-the-unknown.html

The other item was from Quartz. It gives another brief summary of the upcoming changes.

https://qz.com/1365978/the-all-american-pastime-of-quilting-is-being-tucked-into-the-trade-war/

Updated to include a link to this article in Bloomberg:

https://www.bloomberg.com/news/articles/2018-08-21/retailer-joann-calls-on-crafters-to-oppose-trump-s-tariffs

Update 2: As said below in comments, ‘My post is NOT about the politics of this, from either side. As I mentioned, there are economic arguments in both directions. And this is not a question or post about “is it worth it.” It is ONLY to let people know this is an issue they should be aware of. If there are more comments on the politics of it, I will delete them.’ I have very strong opinions on the politics of this. As a retired investment professional with degrees in finance and economics, and many years experience in the field, I also know a few things about the economics of it. I WILL NOT DEBATE those issues here, and I will not allow for others to do so, either. That, again, is NOT the point of the post. Thanks for your respect on this.

Expect to see more on this soon. If enacted, these tariffs have the potential of affecting every part of the quilting industry.

 

 

 

 

27 thoughts on “Tariffs and the Cost of Quilting

  1. Mark

    Thank you for not allowing hateful arguements and comments here. I am really concerned about my local quilt shop because they’ve been in the business for about 60 years. I hate to see this effect a craft I love so much. It literally saved my life because my blood pressure was so high. It gives me a creative outlet.

    Reply
  2. tierneycreates

    Thank you so much for this insightful packed with information post! I heard rumblings but did not know exactly what the issue was and how craft supplies costs would be impacted.

    Reply
    1. Melanie McNeil Post author

      I’m still finding out more about the expected impact but don’t know enough to be able to say anything helpful. When I do I will either write something more myself, or point people in the right direction. Thanks for reading. Hope your day goes well.

      Reply
      1. tierneycreates

        Thanks for doing more research and I am tempted to like buy all the craft supplies now before the prices go up but I cannot decided (and how could I anticipate everything I would need in the future anyway?)

        Reply
        1. Melanie McNeil Post author

          You couldn’t possibly know today what you’ll need a year from now. Also one of the things I’m trying to find out is how much of the quilt shop product is sourced from China, as opposed to, say, Japan or Korea? They are doing digital printing of fabric now in China, which is a newish thing, and allows the fabric companies to get good quality color in smaller lots than they get with screen printing. So there is a lot to understand here, about where the fabric actually comes from and what goes from which countries to which type of distributer (big box vs quilt shop.) And really should there be an us vs them thing on this, either way????? So many questions!

          Reply
  3. CreatedByBella

    Thank you for a great article Melanie. This is a hot topic right now with lots and lots of opinions. Your article was straightforward and unbiased: Well done.

    Reply
  4. snarkyquilter

    Just think of the impact on the various dollar store chains. While I think much of the stuff they sell is cheap crap, I know for some people that’s what they can afford. And I think for U.S. made textiles, that ship has sailed.

    Reply
    1. Melanie McNeil Post author

      Really great point. I don’t know how much of that stuff is on the proposed tariffs list, but the intention this time is to target consumer goods, rather than industrial commodities. So there’s a pretty good chance of hikes on a broad array of items. I don’t know what you call 25% inflation, but it’s certainly damaging for individuals and ultimately the economy. WOW I could go on… Thanks for the comment.

      Reply
  5. KerryCan

    Yikes–I went and read and followed some links and read some more–passions are running very high and in ways I have a hard time relating to! Interesting topic–thanks for the info you’ve provided.

    Reply
    1. Melanie McNeil Post author

      🙂 I’ve avoided reading comments, as I know I would get riled up in unproductive ways. It is an interesting topic. “The economy” is a big, nebulous, hard to understand thing. But as they used to say, “it’s the economy, stupid.” The tariffs and aftermath could affect us all in unanticipated ways.

      Reply
  6. Jan

    As a JoAnn’s employee I received two emails this week. One to employees and the other one to customers. The “made in America” tag was confusing, but I got the gist of the message. Prices are going up.
    However, with every big sale on fleece and flannel generous crafters and sewers come out of the woodwork and individually buy hundreds of dollars worth of fabric, paid for out of their own pockets, to make blankets and quilts for worthy individuals and agencies. Preemies, newborns, sick kids, cancer patients, breast cancer patients, veterans, high school seniors, nursing home residents, hospice patients and everyone in between can be a recipient of one of these lovingly made projects.
    Several customers wait for 60% sales and spend about $400 on $1000 worth of fabric for blankets. That money won’t go as far once these tariffs raise the prices. And the sale events may not be as often, or cut as deep.
    The tariffs also apply to yarn, so crocheting or knitting blankets won’t bypass the increase. In an AP article JoAnn’s says it imports 500 items on the tariff list. Here’s a link to that article.
    https://wtop.com/business-finance/2018/08/us-firms-to-trump-dont-raise-tariffs-on-more-chinese-goods-2/
    I did sign the petition and will be sending a letter to my representatives shortly.
    Jan

    Reply
  7. katechiconi

    Speaking as someone *already* paying the sort of prices you may be looking at in the not too distant future, it IS still possible to be a creative quilter without the huge variety and availability of inexpensive fabrics you have been enjoying. Currently, I’m looking at prices of around AU$25 per metre (39 inches), or US$18. Tariffs are now an economic reality for you but quilters are adaptable and creative. I say: stash rules, treasure your scraps and don’t impulse buy. You can still make beautiful quilts.

    Reply
    1. Melanie McNeil Post author

      Oh absolutely. I’m not a bit worried for my own creative opportunity. The bigger concern is from an industry-wide basis. Small shops will take the first hit. Those who aren’t able to raise prices because of their communities may find their business in trouble. Adjustments are not smooth in this type of thing, and people get hurt one way or the other. Thanks for chiming in.

      Reply
  8. Charlotte B.

    Our president is trying to get other countries to even up the tariffs so everyone will be on the same playing field as far as tariffs go. It will take a little while to do but it will be worth it in the end..before someone thinks I’m just a republican saying this, I am a democrat.

    Reply
    1. Melanie McNeil Post author

      My post is NOT about the politics of this, from either side. As I mentioned, there are economic arguments in both directions. And this is not a question or post about “is it worth it.” It is ONLY to let people know this is an issue they should be aware of. If there are more comments on the politics of it, I will delete them.

      Reply
  9. TextileRanger

    Wow, I followed your link to the While She Naps piece, to the link she gave to the comments made on JoAnn’s Facebook page! Those people are upset, and not in the direction I would have predicted! This will be interesting to follow.
    As far as a personal action — I have been looking at a new sewing machine for about 3 years, but could never commit to spending the money. My current machine was having issues, and the last time I brought it in for repair, I paid $100 but it just got worse. So the possibility of a tariff was the variable that spurred me to go ahead and buy a new machine now. I got it for the same price it was offered at 3 years ago as a show special at the International Quilt Festival. (I admit I did not do actual research as to whether it might be subject to tariff.) I have seen some economic reports that say “spending is up,” and I wonder if a lot of other people aren’t doing the same, buying things before tariffs go into effect.

    Reply
    1. Melanie McNeil Post author

      I’m glad you got your new machine! I don’t know if machines will be affected or not. I saw that a prominent person in the US textiles industry had testified in the spring about the affect of tariffs, and he was specifically asking for textile machines to be exempt, because I guess we have no domestic sources. So I really don’t know the status of it. Thanks for the comment.

      Reply
  10. Chela's Colchas y Mas

    The increase in prices in all areas will hit us soon. This is what happens when reckless decisions are made. Changes do need to be made to make things fairer for all, but not in the manner that has been started by the present administration. Our problems are just beginning.

    Reply
    1. Melanie McNeil Post author

      If the list in this link is current, there’s nothing in here about cotton quilting fabrics.
      https://americansworking.com/fabric-made-in-the-usa/
      Joann has a line of fabrics that are branded “Made in America”, but there’s only solid fabrics shown on their website right now, other than some pre-quilted selections, and there is no other information easily found on it. Were they made in America or just branded that way? In what regard are they made in America? Start to finish? Or just dyed or printed here? No way to tell.

      Another choice, of course, is to “shop the stash” of what we already have, or our friends have, or to buy clothing from thrift shops and repurpose the fabrics in them. Those are good choices, but it doesn’t solve all the problems, of course.

      Reply

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