“It’s just ironic,” says Kenneth Gamache, the president of QT Fabrics. “We were the last vertical company to print, merchandise and distribute our own goods in the U.S., and we just couldn’t compete because of the flood of companies going overseas. We shut it down in 2009. We were in Massachusetts, and hundreds of people lost their jobs.”

QT was printing on cotton that was grown and woven in China. Even so, maintaining a U.S. plant was expensive, and the technology wasn’t top quality. Gamache moved production to Korea and Pakistan, where flatbed fabric printers produce higher quality designs. The company thrived.

And last year, QT became the first quilting fabric company to print all its fabric digitally. “We went to China because they have a plant there that’s invested in high-speed machines that can produce 18 million yards a year,” Gamache says.

Digital fabric printing offers the promise of a profitable future for QT, but Gamache has some new cause for concern.

In March 2018, the Trump administration imposed tariffs on steel and aluminum imported from China. In July, an additional $34 billion worth of goods was added. Recently, the administration announced a third round on $200 billion more in Chinese goods and bumped the tariff from 10 to 25 percent. The new list  includes a large quantity of craft supplies, such as cotton fabric.

Craft-industry businesses – from large chain stores to midsize companies to solo entrepreneurs – now have to contend with the likelihood of a price increase soon on supplies imported from China. Here’s what you should know:

What is a tariff, and what actions are businesses taking?

Tariffs are taxes on imported goods that are collected by customs officials on behalf of the government imposing them. With the exception of agriculture, tariffs have been very low or at zero globally over the last few decades because of free-trade agreements. The United States now is in a trade war with China that could escalate.

The Office of the United States Trade Representative is holding a public comment period on the third round of tariffs through Sept. 6. (Leave a commentand read the comments that have already been filed.) In the past, tariffs have been implemented a few weeks after a public comment period has ended.

Large chain stores, including Ohio-based JOANN, carry a wide assortment of craft supplies imported from China and would be particularly hard hit by the tariffs.

“Nearly 450 of the listed codes would affect JOANN products, with the greatest area of impact related to our fabrics,” the company says in a statement. The store would pass the 25 percent price increase onto its customers. The timing comes right before Halloween, usually the company’s most significant sales period each year.

These craft supplies are on the tariff list

Fleece, faux fur, velour, woven cotton fabric, silk, dye, pigments used to make paint, ink, thread, polyester and nylon fabric, yarn, glass and metal beads, glue, knit fabric, paper-cutting machines, paper products, and washi and other paper tapes.

See the full list of tariffed items here. 

(The majority of premium quilting cotton sold in independent quilt shops are imported from Korea and Japan and will not be tariffed.)

JOANN emailed its customers Aug. 21, calling the tariffs a “Made in America Tax” and asking customers to petition their elected representatives and participate in the public commenting in hopes of getting the items removed from the list. “Every day, millions of Americans use craft supplies and fabrics, such as cotton and fleece, to create handmade products right here in the United States. The Made in America Tax will hurt churches and charitable organizations who rely on craft supplies to create blankets and quilts for veterans, the hospitalized and the homeless,” the email says. JOANN CEO Jill Soltau testified before Congress on the issue two days later.

Why not source domestically?

Hundreds of JOANN customers took to the company’s Facebook page saying that terming a tariff on imported goods a “Made in America Tax” was misleading. Many said that JOANN should stop sourcing merchandise overseas.

“Setup shop in Detroit, invest in your own fabric plant here!” wrote one commenter. “Tons of available real estate & people looking for jobs. Stop looking for who can do it the cheapest & buy in the US.” Another wrote, “Why not buy American? Stop using overseas vendors to provide and produce your products. Support small American businesses. Help them set up business to produce the things you sell. Win/Win right?”

But in its statement JOANN says, “There is no domestic source for many of the products affected by the proposed tariffs, and there is no possibility that a domestic source will develop. … And in fact, many products we sell have never actually had an American source.”

Midsize craft companies report a similar impossibility when it comes to sourcing domestically. Jacquard Inkjet Fabric Systems, a leading provider of digital textile printing solutions based in Healdsburg, California, imports silk from China.

“It’s Chinese silk. That’s what it’s called. That’s where it comes from. That’s where you get the good stuff,” says Hunter Ellis, Jacquard Inkjet’s president.

Ellis also points out that a different administration could lift the tariffs in the future, leaving domestic manufacturers overly vulnerable to market forces.

For solo entrepreneurs who use silk to create products, the price increase from the tariffs could prove difficult to manage.

“I am still in the process of finding out how buying silk from China is going to affect me,” says artist Shauna Blake, who founded her hand-painted silk ribbon and scarf business, Quintessence Silk Art, in 2009.

“One thing that’s frustrating is that silk fabric is not made in the U.S., so it seems unfair for them to tariff silk fabric since all the companies who sell in the U.S. have to import the fabric.”

Blake says if the price of silk goes up, she will be forced to raise her prices, something she’s hesitant to do.

Hand-dyed silk scarf by Shauna Blake of Quintessence Silk Art.

Photo courtesy of Shauna Blake

Hand-dyed silk wrap bracelet by Shauna Blake of Quintessence Silk Art.

Photo courtesy of Shauna Blake

Hand-dyed silk wrap bracelet by Shauna Blake of Quintessence Silk Art.

Photo courtesy of Shauna Blake

Manufacturing likely will shift to other countries

According to many executives, rather than encouraging domestic manufacturing, the tariffs will cause companies to simply shift their sourcing from China to other countries, David Goff, the vice president of Dharma Trading Co., a leading seller of fiber arts supplies based in San Rafael, California, says at least 30 percent of his company’s merchandise will be affected by the tariffs. “What’s going to happen is people will shift their business to India and Pakistan, and that will happen long before anyone will shift their business to the United States because simply put, it’s so much more expensive to manufacture in the U.S.”

Asher Katz, president of Jacquard, a manufacturer of paints, inks and dyes and parent company of Jacquard Inkjet, concurs.

“It’s not going to benefit Americans at all. It’s going to have exactly the opposite effect. So it’s really a political optics move I think, and the real winner is going to be India in a major way.”

Katz says American consumers can only tolerate a small price increase before they begin looking for alternatives. “At a certain point, a hobbyist is only willing to pay a certain amount for a bottle of paint.”

A fabric company executive who wished to remain anonymous said that sourcing fleece in the U.S. is simply not cost effective. “There are two [domestic] factories that used to make it; one of them is still in business and that commodity they make in China. The little bit that they make here is three times my cost so if I had to buy it here, I would have to charge my customers $10 instead of $4.25. Am I in business at $10 where it used to be $4.25? I don’t think so.”

Uncertainty and a heated political climate

For many companies, the tariff issue is creating a sense of uncertainty that’s making it difficult to conduct business as usual or plan for the future.

Several craft companies sent emails to wholesale and retail customers warning of possible price increases, but this can also prompt a backlash. Goff at Dharma Trading sent out an email that he says was meant to be informative. “We wanted to help connect the dots so that people who are watching the news are thinking about this in terms of how it’s going to affect you, because it is. It’s not just international politics. The price of everything you buy is probably going to go up in the next six to nine months.”

The company received a handful of replies that “took that email very politically as if we were bashing the administration and saying they were doing everything wrong,” Goff says. “Things are so politically charged right now, so polarized, but that wasn’t our intent.”

Next steps

If the petitions to get craft supplies taken off the tariff list aren’t successful, JOANN will apply for a company exemption once the tariffs are finalized, according to a company spokesperson. The mounting backlog of exemption requests could mean a long wait before its waiver is processed. But if approved, the craft chain could come away with a distinct competitive advantage over smaller businesses with less bandwidth to lobby D.C. and that would remain saddled with the 25 percent tariff.

Gamache at QT Fabrics says he has a plan if the company has to move out of China, but he’s definitely feeling uncertain. “Those large corporations, they can afford it. At 10 percent, maybe we could have absorbed it, but 25 percent? We can’t eat it all. We’d have to pass it on to our customers. It’s nervous times for us right now. We’re hoping that it won’t go through, or that it’s not 25 percent, but time will tell.”

Craft Industry Fears Major Fallout from New Tariff Activity

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