Next phase of trade war could hit clothing prices as manufacturers leave China to dodge tariffs, warns owner of Vans, North Face
- Tariffs on Chinese-made clothing and footwear would lead to inflation as manufacturing costs rise, says regional managing director of VF Corporation
Consumers could face higher prices for clothing and footwear if manufacturers move out of China to avoid trade war tariffs imposed by the US, the regional director of American apparel company VF Corporation warned.
If Washington were to carry out its threat of placing additional duties on a wide range of Chinese-made consumer goods including footwear and apparel, inflation across the industry would be likely as manufacturing costs in the region increased, said Asia-Pacific managing director Gareth Brooks.
“We’ve been able to help offset the rising cost of labour within our supply chain, but as the trade war begins to bite, inflation of the cost of consumer products is a real possibility,” he said, speaking about the broader clothing retail sector.
VF Corporation, which owns popular brands like The North Face, Vans, and Timberland, is doubling down on its fastest-growing market. On Wednesday it unveiled a new Asia-Pacific head office on the doorstep of mainland China, where an ecosystem of long-term suppliers and manufacturers enables it to produce some of its high-quality outdoor gear.
It has consolidated its two existing offices in Hong Kong to debut a 200,000 square foot main office in Kwun Tong, where up to 1,200 staff will occupy five and a half floors, overseeing marketing, sales, and product supply chains.
The opening is part of the company’s strategic five-year 2021 plan to divert more investment towards Asia with a specific focus on China, the company’s fastest growing market. VF’s China revenue jumped by an annual 22 per cent in the year ending March 30, compared with 11 per cent growth for the Asia-Pacific region overall, according to results announced on May 22.