If the political world is a reflection of national mood, America started off 2024 with a hard look in the mirror and didn’t quite know what was staring back.
The nation was bitterly divided and once again facing a stark choice.
Donald Trump was resurgent, on trial, stewing about losing the last election and looking to mix things up again. President Joe Biden, and later presidential hopeful Vice President Kamala Harris, were vying for another four years of more traditional policies out of Washington.
America chose narrowly, but decisively for a big-time change — or rather a change back — by electing Trump again as president.
It’s a result that has half the country embracing President Trump and the things he brings with him and the other half of the country just bracing itself.
This time, Trump is better positioned than before to make his mark on the country.
With a Republican-led House and Senate and a largely conservative Supreme Court, the changes could be, like Trump himself, norm shattering.
Lower taxes, a lighter regulatory hand, less government spending and tariff wars are expected to be the order of the day once the inauguration comes on Jan. 20.
In particular, Trump loves tariffs, which in his hands become a “big stick” form of economic diplomacy. He ran on a promise to impose duties of up to 60 to 100 percent on goods Made in China, and subsequently said he would impose tariffs of 25 percent on goods imported from Mexico and Canada and 10 to 20 percent on goods from other countries. The latter, if they take effect, would not only impact products from low-cost producing nations but also everything from fine wines to luxury goods imported from Europe. (Trump had imposed tariffs on China imports in his first term, most of which the Biden administration has kept in place.)
But where Trump sees an opportunity to pressure other countries, fashion companies see a tax at the border that will increase their own costs and ultimately force them to raise prices on shoppers.
Before the election, the National Retail Federation argued against Trump’s proposed tariffs, saying the plan would have American consumers paying up to an additional $13.9 billion to $24 billion for apparel.
On the flip side, the textile industry sees more tariffs as a matter of life and death.
Kim Glas, president and chief executive officer of the National Council of Textile Organizations, said last month that, “Our industry has lost 21 manufacturing facilities over the last 18 months, and we have strongly supported additional penalty tariffs to hold trade predators accountable for unfair trade practices and forced labor issues.”
It remains to be seen if Trump’s tariff bite is as bad as his bark.
S&P Global Ratings — which expects GDP growth to slow to 2 percent next year from 2.7 percent this year — projected that U.S. tariffs on Chinese imports would rise only to 25 percent from 14 percent and that China would respond in kind.
The rating agency also said that inflation would likely “inch higher” and could slow the Federal Reserve’s drive to cut interest rates.
But that’s what the experts, or at least some of them, say. Many Americans are taking expert opinion with an extra grain of salt and relying on their own council.
Consumer sentiment has risen for five consecutive months and increased 3 percent this month, according to the University of Michigan Surveys of Consumers.
“The expectations index continued the post-election recalibration that began last month, climbing for Republicans and declining for Democrats in December,” said Joanne Hsu, director of the closely watched survey. “This adjustment process is consistent with a response to actual underlying changes in expectations for the national economy, and not merely an expression of partisanship.”
Democrats, for instance, are worried that Trump’s tariff hikes will lead to more inflation. “Republicans disagreed,” Hsu said. “They expect the next president will usher in an immense slowdown in inflation.”
So Trump and his chaotic, turn-on-a-dime, launch-into-conflict style are back and nobody can quite agree on what comes next.
After the trade wars of Trump’s first administration, the shutdown of the pandemic and hectic restart and rush of inflation that followed, fashion has gotten used to being quick on its feet.
At least that’s what the industry’s savviest players say.
“In today’s world, successful companies need an agile, diversified, resilient supply chain,” said Patrice Louvet, president and CEO of Ralph Lauren Corp., in an interview.
“We have dramatically diversified our supply chain from where it stood seven, eight years ago, where it was quite dependent on just a few markets,” Louvet said. “Today, we have a supply chain that combines near-shoring, multisite sourcing on given products.”
Ralph Lauren imported 15 percent of its goods from China in fiscal 2024, down from about 33 percent five years earlier.
“We are well positioned to continue to navigate what’s going to be a volatile environment,” Louvet said.
Just how volatile is still anybody’s guess.
At the very least, the tone is changing in Washington, as is clear from Trump’s social media greeting at the start of the holiday season:
“Happy Thanksgiving to all, including to the radical left lunatics who have worked so hard to destroy our country, but who have miserably failed, and will always fail, because their ideas and policies are so hopelessly bad that the great people of our nation just gave a landslide victory to those who want to make America great again! Don’t worry, our country will soon be respected, productive, fair and strong, and you will be, more than ever before, proud to be an American!”
