Trump’s Tariffs Won’t Make Us Pay $50 for a T-Shirt
President Trump’s tariff policy seems confusing to critics who don’t understand the purpose of tariffs.
Pundits and economists largely agree that tariffs on textiles will harm the American poor and working class by making clothes more expensive without restoring American textile manufacturing. Although this approach tugs at the heartstrings, it exaggerates the effects of textile tariffs and misrepresents their purpose.
Free trade advocates praise the abundance of “fast fashion” available to the poor as evidence of globalism’s positive impact.
Axios notes that since 1990, real apparel prices have fallen by 56 percent in the U.S. It neglects to mention, however, that American apparel manufacturing has fallen by 90 percent since 1990, when the industry employed nearly a million people. Today, less than three percent of clothes sold in the U.S. are made in America.
The argument that the trade-off was worth it—because globalism clothed the lower classes—might hold weight if we were three decades removed from the Great Depression. But almost no Americans struggled to afford clothes in 1990. All this means is a Wal-Mart T-shirt fell in real price from $22 to $10, while 900,000 fewer Americans have jobs.
Scrutinizing the Affordability Argument
As a candidate and President, Donald Trump has consistently advocated for a 10 percent “baseline” tariff on all countries. Understandably, during the recent 90-day pause, that’s where he reduced tariffs on countries willing to negotiate trade deficits. A flat 10 percent textile tariff has only a modest impact on retail prices and does not significantly block low-income consumers’ access to clothing.
When the U.S. imposed tariffs on textiles from Chinese during the 2018–2019 trade war, only a tiny fraction of tariff costs reached consumers, with importers and retailers absorbing the rest. In 2023, the U.S. International Trade Commission (USTIC) found that U.S. apparel consumers bore only 4.3 percent of the cost of those tariffs.
The difference is that tariffs then only targeted China. The share of American clothing made in China has since nearly halved, because companies scrambled to move production to Vietnam and Bangladesh. The beauty of tariffs now is they leave clothing outsourcers nowhere to run or hide.
Yale University's Budget Lab estimated a retail clothing price spike of eight percent from Trump’s “Liberation Day” apparel-related tariffs alone. Taking the entire tariff package into consideration, the Budget Lab estimated it will raise apparel prices by 17 percent. This, however, came before Trump’s 90-day reprieve.
So, retailers will increase $10 T-shirts to a nice round $11.
The Purpose of Textile Tariffs
Critics also mischaracterizes the intent of textile tariffs. Free trade proponents oppose tariffs generally, but they often act like they only serve two purposes: as a negotiation tactic or to bring back manufacturing.
Although the draconian tariffs placed on China in April did aim to bring that country to the negotiating table to fix our countries’ trade imbalances, tariffs on textiles don’t necessarily aim to make textile factories great again.
A 10 percent tariff is too low to incentivize mass repatriation of textile factories, as labor cost differences between Southeast Asia and the U.S. are too great. For example, a garment worker in Vietnam earns roughly $250 per month, compared with $2,600 for an American worker. No reasonable tariff could close this gap without making clothes prohibitively expensive.
Treasury Secretary Scott Bessent angered American textile manufacturers recently when he said Trump is interested in “the jobs of the future, not the jobs of the past.” He added, “We don’t need to necessarily have a booming textile industry where I grew up again, but we do want to have precision manufacturing and bring that back.”
One commenter on X complained, “Yet we keep tariffs on textiles and furniture? Such an incompetent bunch of folks.”
BESSENT: WE NEED PRECISION MANUFACTURING IN U.S., NOT NECESSARILY TEXTILE INDUSTRY
— Party Rental Owner | Nate Jaehnig (@natejaehnig) April 29, 2025
Yet we keep tariffs on textiles and furniture? Such an incompetent bunch of folks.
This is not an uncommon sentiment. Many have become accustomed to low tariffs or complete free trade and can’t imagine raising tariffs on an industry the U.S. has no chance of repatriating.
Instead, textile tariffs serve a third purpose that fits squarely within Trump’s long-term goals for the country, such as replacing the federal income tax.
In 2022, when China alone felt the brunt of textile tariffs, the U.S. raised slightly over $1.5 billion off tariffing imported textiles—yet the U.S. imported around $132 billion in textiles that year. With a global 10 percent tariff, the Treasury could have raised $13.2 billion from textile imports.
A flat 10 percent textile tariff will not recreate the 1980s, when over half the clothes Americans wore were made in the U.S. But it can bring back some high-end apparel. The USTIC’s 2023 study found that Trump’s first-term tariffs on China boosted American textile production by six percent.
The Bigger Picture
Tariffs serve three purposes: negotiation leverage, job repatriation, and revenue generation.
Trump promised a flat 10 percent revenue tariff on countries that treat the U.S. fairly. For those that don’t, tariffs will rise to bring them into compliance. For many industries, these will help repatriate manufacturing. The textile industry is not one of them.
The fear that this will relegate the poor and working class to second-hand clothing stores ignores the tariff’s rate and purpose. Americans don’t like taxing themselves directly or inflating the dollar, so the 10 percent textile tariff will help pay for government services by taxing imports. It will cause a slight price bump, not a crisis.
A flat 10 percent textile tariff is a measured policy to raise revenue, not a protectionist bludgeon. Americans will, indeed, pay negligibly higher prices for clothes; meanwhile, higher-end apparel manufacturing jobs will receive moderate protection from outsourcing—and some will even repatriate. Free trade dogma must not blind us to the nuanced benefits of strategic tariffs.
(READ MORE: Make Food Great Again by Making Farmers Hire American Again)
