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Columbia Sportswear creates ski jackets and hiking boots that withstand the weather: wind, rain, snow, etc.
Set in a vast area adorned with kayaks hanging from the ceiling, this 80-year-old shop has long been protecting its outdoor activities from Washington's whims, using what the company calls "pricing engineering" – adjusting its products to reduce import taxes on materials from outside the United States, such as rubber soles, zippers and waterproof nylon
But Colombia now fears that its methods are threatened by a president whose business strategy leaves little room for American companies that produce and sell around the world.
] The use of tariffs by Trump – a steep way to revitalize the industry in the United States – has required changes in large multinational corporations, although not always the changes that the president expects. Harley-Davidson and Micron are transferring their production to factories located in Europe or in Asian regions, while others are delaying their expansion plans due to the uncertainty of trade.
At Columbia, the solution is to use more of the long-standing face of the many trade restrictions imposed in the United States and abroad. Each waterproof woolen vest and glove with the brand logo is made abroad. The company relies on a tracking system of its stylists, which relies on a team of trade experts, who recommend solutions that can help a garment to bypbad rates. .
In a conference room full of samples, Jeffrey W. Tooze, Vice President of World Trade Columbia, showed how a small design change can be a big profit for a particular product.
An ultra-thin fabric sheath at the outsole of a boot or a shoe can bypbad a 37.5% duty on rubber soles imported from the United States The sole of fabric is taxed at 12.5%. (Customers notice that the fabric wears out after a few days and reveals the rubber outsole underneath.)
A waterproof jacket generates a rate of 7.1%, while the one that was not waterproofed in 27, 7 percent. A coat with at least 10 percent featherweight featherweight has a tariff of only 4.4 percent.
These distinctions do not concern national security or economic concerns – they are the result of long designed to protect some manufacturers. Knowing them and using them is part of the business culture of Colombia since Tooze joined the company in 2001.
"This is part of a process of reflection, of making a difference. creative thinking, an element of DNA, "he said.
What Columbia does not do, in large part, is to create jobs in production in the United States, as Trump would like.
Tim Boyle, the CEO, said in a recent interview that there was nothing the President could do to bring his production to the United States, where costs would be higher and clothing manufacturing skills are declining after decades of outsourcing.
"There is no way, Zero, nothing," said Boyle.
Peter J. Bragdon, Columbia's General Counsel, agrees. "We already have huge tariffs on products," he said.
Columbia manufactured all of its products in Portland. But as the company grew from $ 1 million in annual business to $ 25 billion, it was looking for a cheaper workforce at home. foreign to make hats, gloves, winter jackets, hiking shoes, camping pants and equipment.
Boyle said the company had been inspired by another Oregon company, Nike, which was adopting the approach of "designing and marketing goods from a central location – United States, Portland or any other place – to produce them, where it must be produced in the world and sold everywhere. "
Today, just under 40% of Columbia 's business is located outside of the United States and all of its products are manufactured abroad. Its largest sales are in Asia, Europe and Canada. There is a joint venture in China that the company is buying from its Chinese partner. Vietnam is your biggest supplier.
To Import Finished Goods Into Stores In The United States, Columbia Must Master An Old Business Law, The Smoot-Hawley Law Of Tariffs This 1930 Law Increased Tariffs In Order To Protect US Businesses but economists later referred to it as one of the main causes of the Great Depression. Many of its measures have been excluded, but some remain, particularly those affecting the clothing sector.
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In addition to imposing imported steel and aluminum, the Trump administration imposed tariffs of US $ 250 billion on Chinese products, with the possibility to tax all imports from China. Other countries have retaliated – China, Europe, Canada and Mexico – by taxing US goods entering their country, including clothing.
Up to now, Colombia has not suffered much, partly because of the Chinese tariffs basically avoid its segment. But the company is preparing for the second stage, which will probably affect many of its imports, especially Chinese shoes.
Colombia is preparing for any eventuality. Some of the issues discussed include: Is it possible to quickly move goods from your mills to the stores before the new rates begin to take effect? Is it possible to change the way your products are made – for example, increase production in Vietnam and decrease in China?
"I think we've had two meetings a day to discuss it daily in the last two months," said Emily Vedaa, Columbia's Director of Global Trade. "How can we mitigate the shock?"
Trump justifies his approach by saying that any short-term economic loss would lead to long-term growth. He also talked to companies like Apple, asking them to change plants if they did not like his plan.
"Make your products in the US instead of China Start building new plants now, but companies like Columbia say they can not adjust their way of working overnight to deal with policy changes, especially when they are not defined. "
But companies like Columbia say they can not adjust their way of working day by day to cope with policy changes, especially when they are not defined. For example, Trump has threatened China with additional tariffs while baderting that an agreement could be reached.
Columbia Director of Operations Thomas B. Cusick said the company had already received all his mailings in the fall. the additional stock of goods for the Christmas season. In addition, he has already purchased all products for the upcoming season and has reserved production capacity for the fall line of 2019. Any changes made as a result of the Washington stock would come into effect than in 2020 – which implies significant investments.
Almost all major American retailers are in a similar situation: 98% of the shoes bought in the country are manufactured abroad and 97% of the clothes sold in the United States. are produced in other countries
"This migration to Asia has been going on since the 1960s. Anyone who invested in machinery to make fabrics or something more extreme, such as plastic to make nylon or any type of textile product – all these investments have been made Asia All the technology, "said Boyle.
Beyond the factories, the manufacturing technique was also out.
"Drawing the shirt you are wearing is one thing, you sketch it on a sheet of paper, but to make sure someone likes it, you need technical expertise in sewing. , which no longer exists in this country.You can create things that no one could use, "Boyle said.
He admits that if Trump imposed more tariffs on China, Colombia would have no choice but to charge more, despite the company's long history of Adjustment to the trade winds.
"Prices will go up and we will pay the costs, we have no other option," he said.
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