Victor Lytvinenko is thumbing through emails on his iPhone trying to find the one that best shows the damage the global trade war already has done to his little, decade-old American jeans company.
The 37-year-old finds a message from a customer in Scotland who’s apologizing for canceling an order worth tens of thousands of dollars. The reason? The shop owner balked at paying an additional 25 percent tariff the European Union slapped on American-made jeans in June as part of its response to President Donald Trump’s duties on steel and aluminum.
“We’ve already lost two accounts,” said Lytvinenko, who co-founded Raleigh Denim Workshop in Raleigh, N.C., with his wife, Sarah Yarborough, in 2008. “That hurts.”
Lytvinenko was in Manhattan in late July for an apparel trade show. The talk was very much about how American-made jeans had been pulled into the trade spat.
It’s the latest gut punch for an industry that already had declined into a shell of what it once was. In the past year, two of the last-standing major denim mills closed, including the biggest — Cone Denim’s facility in Greensboro, N.C., that many businesses say was the last to make high-end denim fabric in the United States on a large scale.
Increases in California’s minimum wage also helped drive several apparel factories in Los Angeles to shutter or move to Mexico, adding to a tumultuous year for an industry that’s been just hanging on.
On top of that, free-trade agreements had been pushing blue jean-making overseas for two decades, and now the remaining manufacturers can’t believe the irony of getting hit by a return to protectionism.
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Major brands, such as Levi Strauss and Co., already had largely bailed, shifting almost all of their production to Asia or Mexico. What’s left is mostly small businesses surviving by pitching craftsmanship and Americana in the premium end of the market with jeans priced at $200 or more.
“It’s another blow,” said Roy Slaper, who runs jeans-maker Roy Denim in Oakland, Calif.
The tariffs don’t make sense economically because U.S. production is such a “microscopic” part of the global market, he said.
U.S. manufacturers shipped just $31 million worth of jeans to the European Union last year, or about 16 percent of the industry’s total global exports.
“But politically, I can see why,” he said. “Nothing is more American than jeans.”