President Donald Trump’s protectionist rhetoric has been making headlines since his campaign for the White House in 2016.
Now, with Republicans in the House of Representatives proposing a border-adjusted tax — which has been dubbed a “destination tax” or “Made In America tax” — the conversation surrounding the impact of the administration’s policy and rhetoric for brands manufactured in the U.S. and elsewhere is taking new form.
Here, FN asks two trade experts to sound off on the biggest challenges and opportunities for ‘Made in America’ under Trump.
Matt Priest, president and CEO, Footwear Distributors & Retailers of America
On the Trump administration’s approach to domestic manufacturing:
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“Their views on [expanding] domestic manufacturing are based on false premises, and that has set them on the wrong path. [They say] we don’t produce in the U.S. anymore — that’s false. We produce more in the U.S. in general — from a manufacturing-output standpoint — than we’ve ever produced in our history. The real question is: How do we deal with innovation? Innovation by its nature is disruptive. So [we need to address] the efficiencies that it drives and how that impacts job creation.”
On the impact of a potential border adjustment tax:
“A lot of production here relies on foreign inputs, and you won’t be able to deduct the cost of those inputs from federal income tax filing. That’s going to hurt domestic manufacturing, but it’s marketed by the House Republicans as a ‘Made in the USA’ tax. Our supply chains are so integrated and diverse that it’s hard to separate rhetoric and understand where the policy will actually encourage domestic production.”
On whether Made in the USA will expand under President Trump:
“Until you can democratize innovation in a cost-effective way that keeps price points as competitive as they are now, we’re not going to have this massive movement. It’s fun and interesting to talk about, and it’s driven by athletics — because that’s where most of our innovation is — but it’s not for the masses at this point.”
Rick Helfenbein, president and CEO of the American Apparel & Footwear Association
On what the industry should be doing:
“We need to expand the current U.S. workforce through vocational training in the new technologies being used to manufacture tomorrow’s shoes. We must open foreign markets for U.S.-made and branded footwear, such as a lucrative market like Japan that loves made-in-the-USA product.”
On the impact of a potential border-adjustment tax:
“BAT is an existential threat to the future of U.S. footwear manufacturing. Even if we make the shoe here, we will need to import many of the materials. BAT will make the import of those materials cost-prohibitive. And it will make it even harder to manufacture here.”
On whether Made in the USA will expand under President Trump:
“Brands have always been interested in ‘Made in the USA’ and would love to do more; the problem always shifts back to whether it can be a profitable business model. So from that point of view, the Trump administration’s American-made rhetoric hasn’t moved the needle much.”
