With talks of new tariffs on the horizon, many in the B.C. apparel industry are wondering what this means for day-to-day business. We’ve been chatting with our industry friends and want to share some thoughts on how tariffs might affect us and what we can do to stay ahead.
Tariffs: What Are They and What Is Happening?
Tariffs are additional taxes imposed on goods when they cross borders. While specific figures are not yet available, industry experts predict that new tariffs would raise the cost of materials and finished products. This would lead to higher prices for consumers, which may affect demand, especially as people are already dealing with inflation in areas like food and everyday items.
Key Things to Know:
25% Tariff on Canadian-Made Goods: If implemented, anything labeled "Made in Canada" could face a 25% tariff when exported to the U.S.
Changes to De Minimis Rule (Section 321): Currently, shipments under $800 to the U.S. are exempt from duties and tariffs. However, Canada might be excluded from this exemption if tariffs are introduced, impacting businesses that rely on small cross-border shipments.
How Could This Impact B.C. Apparel & Gear Professionals?
New tariffs could lead to higher costs on inbound raw materials, finished products, and transportation. For B.C. apparel and gear professionals, this could mean:
Increased Costs: Businesses may need to raise prices, which could reduce consumer demand.
Small Business Challenges: Balancing price adjustments while maintaining product quality will be crucial.
Larger Business Pressures: Larger businesses may absorb some costs, but margin pressures will still be a concern.
Shifting Supply Chains: Companies may need to explore alternative suppliers or sourcing strategies to reduce the impact.
What You Can Do to Prepare
While there’s no one-size-fits-all solution, staying informed, flexible, and proactive will be crucial. Here are some steps to consider:
Focus on Local and Canadian-Made
Strengthen partnerships with domestic manufacturers and suppliers.
Advocate for tax breaks or benefits for Canadian-made products to support domestic purchasing.
Explore New Markets
Expand into regions outside of the U.S., such as the EU and Asia, where consumer demand remains strong.
Diversifying your customer base can help offset potential losses due to tariffs.
Be Strategic About Pricing
Gradual price increases may be necessary, but businesses should be mindful of customer sensitivity.
Consider bundling or subscription-based models to add value while maintaining margins.
Look for Government Grants & Support
Explore available federal grants and funding programs that could offset financial strain.
Stay updated on potential incentives for Canadian-made products or changes in tax policies (e.g., possible exemptions from GST/PST).
Monitor Government Actions & Industry Advocacy
The Canadian government is considering retaliatory measures, and changes could happen quickly.
Keep an eye on trade discussions, as potential renegotiations of CUSMA/USMCA may influence the future of tariffs.
BCAG is in active discussions with Federal industry groups to ensure that apparel and gear professionals in B.C. have representation at the table.
Stay Connected and Collaborate
Networking and sharing insights within the industry can help businesses navigate these challenges together.
Participate in forums, industry events, and associations to stay informed and contribute to the collective response.
What’s Next?
In these uncertain times, the best way to move forward is together. Whether you’re an apparel designer, brand, manufacturer, or retailer, we’re all in this together. It’s more important than ever to support Canadian-made products, build strong local supply chains, and continue innovating to keep our industry resilient.
As a community, we can navigate these challenges and keep B.C.’s apparel and gear industry thriving.
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