We need to talk tariffs

[MadCat]

Sale prices in a few months now will be what the jacket cost two days ago. It’s price gouging.

I know, but what can we do?

 

[Fonzie]

I know, but what can we do?

Not much really, so I recommend that you check the classifieds for something you may like instead and support our fellow TFL members.

Let’s keep this wonderful community of ours happy and engaged in these current times of economic uncertainty.

 

[TLW '90]

Schott probably uses a lot of imported materials to be able to produce their jackets in the US. Now they have to pass on those extra costs to the consumer.
Real time proof that tariffs are a just a tax on the consumer.
American produced goods also increase prices automatically with this policy.

Be safe everyone, it’s a jungle out there.

The FTC has lots of regulations and it has what are known as qualified statements and unqualified statements.

A qualified statement is when there are things you're required to disclose in the COO claim of your products.
You can't just say " MADE IN USA " if there's a significant percentage of imported materials or workmanship...etc

An unqualified statement is when your product is entirely American made or the percentage of imported materials or is not significant enough to need disclosing and you're allowed to simply mark it " MADE IN USA ".
There must be a very high percentage of domestic materials and in order to qualify as " MADE " vs just " BUILT " or " ASSEMBLED ", the work to transform these raw materials into a finished product must be done here in the USA as well.
You can't say " 100% MADE IN USA " unless ot truly is though, and this is uncommon because for many things nobody makes every component in house and you never know if you'r supplier imports anything for the components they make.

For Schott to be able to use a " MADE IN USA " tag, anything that might be imported must be relatively insignificant.

 

[TLW '90]

@TLW '90 agreed that even one watch is a luxury purchase these days in terms of whether or not anyone actually needs a mechanical or quartz timepiece when everyone has a phone.

I would have to disagree about the phone thing.
Yes most people have one, but many people like me can't really use theirs for time keeping every day.
At my blue collar job time is kind of important , but I can't keep my phone in my pocket nor would I want to be reaching into my pocket with dirty wet greasy hands to check the time so I wear a wrist watch.
I'm not wearing high end luxury watches though.

 

[Fonzie]

The FTC has lots of regulations and it has what are known as qualified statements and unqualified statements.

A qualified statement is when there are things you're required to disclose in the COO claim of your products.
You can't just say " MADE IN USA " if there's a significant percentage of imported materials or workmanship...etc

An unqualified statement is when your product is entirely American made or the percentage of imported materials or is not significant enough to need disclosing and you're allowed to simply mark it " MADE IN USA ".
There must be a very high percentage of domestic materials and in order to qualify as " MADE " vs just " BUILT " or " ASSEMBLED ", the work to transform these raw materials into a finished product must be done here in the USA as well.
You can't say " 100% MADE IN USA " unless ot truly is though, and this is uncommon because for many things nobody makes every component in house and you never know if you'r supplier imports anything for the components they make.

For Schott to be able to use a " MADE IN USA " tag, anything that might be imported must be relatively insignificant.

In that case, Schott is just profiting from the current economic circumstances and scalping their own compatriots by rising prices on their products for the only purpose of increasing profits without increasing the quality of the product, the service or hiring more American workers.

That is price gouging and misunderstood capitalism in its worst manifestation.

So much for a “good ol’ American company with good ol’ American values”…

 

[RDS]

For a number of reasons I don’t believe tariffs will lead to much in the way of manufacturing returning to the US.
If that was even a possibility I can see that many, many businesses will hunker down, work with their importers or distributors to try to minimise the impact of tariffs on the US consumer and wait for four years until the Trump administration is out of the White House.
Of course, in that time it is going to be very tough and it’s possible that quite a number, both US based or Worldwide, may not make it through the madness. Also, peoples buying habits will change i.e. rather than drinking scotch whisky in the US, some may turn to bourbon. But, equally this can also work the other way around and those outside the US may find alternatives to US made products i.e. drink scotch whisky instead of bourbon. Some may even boycott US made products and new business partnerships will be formed across the World, excl. US.

There won’t be any winners. Businesses worldwide and consumers, especially those in the US, will be the losers.

 

[Aloysius]

For Schott to be able to use a " MADE IN USA " tag, anything that might be imported must be relatively insignificant.

The jackets are either Made in USA or "Made in USA of imported materials", the latter because most of the leathers are only available from Europe.

 

[cl206]

For that much, fly to Europe for a vacation, pick up the jacket, wear it home.

yep, i just told my wife yesterday when we go to japan in august, i am 99% planning on picking up a RMC, FW, DH etc, JUST one, especially if the fit is spot on.

 

[cl206]

I know, but what can we do?

classified OR when on vacation...

 

[Monitor]

Good and informative thread. I was just thinking about this in the morning, especially from an European standpoint as I'm not really sure how does that affect our clothing manufacturing here. . .

In that case, Schott is just profiting from the current economic circumstances and scalping their own compatriots by rising prices on their products for the only purpose of increasing profits without increasing the quality of the product, the service or hiring more American workers.

But that's the thing - I hear you but also, in what way could the quality of the Schott product actualy be increased? Schott does Schott and they're already perfect at doing Schott so sans sourcing exclusively American tanned leather, I don't see what is there to be improved upon.
Alongside Vanson and Avirex (partially), they're possibly the only American leather apparel manufacturing company still producing in the USA so from a business perspective, there wouldn't be any sense in not profiting from it. It's good capitalism.

 

[greenc]

I would have to disagree about the phone thing.
Yes most people have one, but many people like me can't really use theirs for time keeping every day.
At my blue collar job time is kind of important , but I can't keep my phone in my pocket nor would I want to be reaching into my pocket with dirty wet greasy hands to check the time so I wear a wrist watch.
I'm not wearing high end luxury watches though.

@TLW '90 I hear you on the watch front - I wear a watch everyday because I like how it feels, I'm old school, and I don't want to be bothered with having my phone on me all the time. The point that I was trying to make is that today even an inexpensive mechanical or quartz watch isn't as much a necessity as it was even 20 years ago.

I would guess that the majority of watch buyers these days are doing so out of an enthusiasm for wearing a watch - or in some cases the fashion element of it - rather than the necessity of having a device you wear to give you the time.

If that's the case and we for the most part don't need a wristwatch, then they become a luxury-type purchase regardless of the price point because they simply aren't required, we just want them.

And to be clear, there are a whole bunch of them that I would love to own.

Same with leather jackets - there are so many beautiful pieces from a variety of manufacturers that I really admire. The What Jacket Are You Wearing Today forum is a favourite of mine.

 

[greenc]

I want to thank everyone for their thoughtful responses, I appreciate it.

And I agree with @Fonzie, we at TFL need to look out for each other by offering reasonable and considerate pricing on Classified jackets.

Thinking of Lost Worlds, I believe Stu prides himself on sourcing American horsehide, which may insulate him from price increases, etc. That said, if we all turned to him tomorrow and requested a jacket he'd be completely overwhelmed and unable to accommodate, which means that perhaps this will be an opportunity for new manufacturers to step forward and create new patterns and models.

But I agree that getting setup as a manufacturer is time consuming, expensive, and risky so in the short-mid term we're going to suffer the established manufacturer prices, whatever they may be. Sigh. Rats.

By the way, does anyone here know how this will actually work? Will manufacturers and/or retailers simply raise the prices, collect the tariffs and then on a quarterly basis send the money to the government?

 

[RDS]

By the way, does anyone here know how this will actually work? Will manufacturers and/or retailers simply raise the prices, collect the tariffs and then on a quarterly basis send the money to the government?

Nobody knows, including those in The White House.

 

[TLW '90]

@TLW '90 I hear you on the watch front - I wear a watch everyday because I like how it feels, I'm old school, and I don't want to be bothered with having my phone on me all the time. The point that I was trying to make is that today even an inexpensive mechanical or quartz watch isn't as much a necessity as it was even 20 years ago.

I would guess that the majority of watch buyers these days are doing so out of an enthusiasm for wearing a watch - or in some cases the fashion element of it - rather than the necessity of having a device you wear to give you the time.

If that's the case and we for the most part don't need a wristwatch, then they become a luxury-type purchase regardless of the price point because they simply aren't required, we just want them.

And to be clear, there are a whole bunch of them that I would love to own.

Same with leather jackets - there are so many beautiful pieces from a variety of manufacturers that I really admire. The What Jacket Are You Wearing Today forum is a favourite of mine.

Everybody knows before buying most of the things they buy whether they truly need them or not, and of course the average person living in the 1st world buys a lot of things they don't need.
We may try to justify them sometimes, but we usually know we don't really need them.

 

[TLW '90]

For a number of reasons I don’t believe tariffs will lead to much in the way of manufacturing returning to the US.
If that was even a possibility I can see that many, many businesses will hunker down, work with their importers or distributors to try to minimise the impact of tariffs on the US consumer and wait for four years until the Trump administration is out of the White House.

Just remember that the policies which got him elected could very well get his VP elected to replace him 4 years from now.
4 years is definitely not enough to see a very significant positive impact, but 8 or even 12 years of these policies if were lucky could provide quite positive results for the US if they are possible.

All I'm saying is that ball is rolling now and we'll just have to see how far it goes if it's allowed to keep rolling.




Prices of things that we enjoy discussing here are going up and there's no doubt about it, but I believe people will eventually get used to those prices.
The initial sticker shock will hit, but how many here look back at how much less they payed a few years ago just before buying another at today's high prices ?
We all long for the prices of yesterday, but it doesn't stop most of us from paying up for new stuff today.
We don't like it but the prices of everything tends to go up together and consumers adapt.

 

[MrProper]

Think of a U.S. buyer for a $400K Lamborghini - I can't imagine they'd want or even accept an increase of $100,000 over the sticker price given the 20% tariffs on European goods.

To be honest, I'm not sure about that. Something like this is a status symbol and a higher price is more likely to increase status. Anyone who can spend $400,000 on a car will also spend $500,000 if the desired effect is achieved. That's not a rational purchase.

 

[Monitor]

To be honest, I'm not sure about that. Something like this is a status symbol and a higher price is more likely to increase status. Anyone who can spend $400,000 on a car will also spend $500,000 if the desired effect is achieved. That's not a rational purchase.

Yeah, agreed.

I don't understand why people complain about the rising prices of luxury clothes. What difference does it make if, I dunno, Aero increased their prices by a couple of hundred dollars? If you can afford a $1200 leather jacket, you should just as easily be able to buy a $1400 leather jacket.

 

[JackBroChill]

Anyone know how this will effect stuff bought off Japanese auction proxy sites? Those will be subject to tariff if they're above the de minimis, right?

Have been eyeing something that the seller keeps lowering the price of but with a stornger yen and tariffs it's unlikely to actually get cheaper by the time he lowers it to where I was hoping...

 

[dannyk]

Yeah, agreed.

I don't understand why people complain about the rising prices of luxury clothes. What difference does it make if, I dunno, Aero increased their prices by a couple of hundred dollars? If you can afford a $1200 leather jacket, you should just as easily be able to buy a $1400 leather jacket

Im not 100% sure about that. I think there is a margin still in that price range where maybe it’s not a matter of can, it’s the “easily” part. It’s more like ehh that extra 200-300 someone could afford but it’s like ugh should I? What are my other bills currently? Is it better spent going somewhere else? Should I save it? It’s tax season here in the US like for example do I owe on my taxes should it go to that? Where the Lambo one yeah sure. If you can afford a 400,000 car when you’re talking that much an extra 20-30 hell 100,000. If you’re that rich that extra is like 20 bucks to me. I do think in the thousands a few hundred could be the difference. Because at this level maybe they decide to just get a second hand jacket then or find another maker for a little less. There’s more options in this tier. Where there’s not as many 500,000 dollar cars and again at that price you’re probably set for life and your children’s life. Someone might say that Aero is 1,400 but there’s a second hand vanson for 400 that’s similar and a 350 dollar Schott I wanted. Maybe they just do that instead ya know?

But that’s just all hypothetical and not really important unless someone is directly in that situation. It’s like arguing with a cloud or something haha. All that does matter is these tariffs are going to effect the US economy and its citizens massively and since the US economy is so huge the worlds as well. Whether it’s good, bad, both, the one thing I know for sure is it will be interesting.

 

[greenc]

Thank you all again for your responses. @Monitor you alluded to this earlier - and @dannyk above - I think that what may begin to happen is that people reevaluate their aspirational, non-essential purchases. @dannyk to your point I agree that people may begin to look for other manufacturers to fulfill the need. And that may happen out of simply not having the extra money that the tariffs require, and it might happen because consumers are not interested in paying more for an arbitrary tax.

@MrProper I concede that my Lamborghini example is a bit out there but I was using it to illustrate that even if a person has the cash on-hand to make a huge luxury purchase, they too may re-think the want to do so given a 20% arbitrary tax.

My guess - and I hope this isn't the case - is that prices on the secondary market will rise as more and more retail customers look to alternative avenues to spend money in.