Craft Industry Fears Major Fallout from New Tariff Activity

“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.

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.