American blue jean manufacturers say they’re losing business after the European Union imposed a retaliatory tariff on the product earlier this year.
Bloomberg News reported Friday that many denim manufacturers had already shifted their business overseas, and that the 25 percent tariffs on the imports are another blow to the industry.
Victor Lytvinenko, who runs Raleigh Denim Workshop with his wife, Sarah Yarborough, told the news agency that they have lost two accounts as a result of the tariffs. He said a client in Scotland had canceled one order that was worth tens of thousands of dollars over the tariffs.
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“We’ve been viewing Europe as a huge market opportunity,” Lytvinenko told Bloomberg. “It’s a huge bummer because we’ve been growing every year, creating manufacturing jobs and building great products here in North Carolina. This hurts our prospects.”
Scott Morrison, the founder of denim company 3×1, called the EU tariffs “a slap in the face” for American manufacturers.
He told Bloomberg that the company has avoided covering the full cost of the tariffs by sharing it with a European distributor, but added that he’s “not sure if it’s sustainable for a small business like ours.”
Bloomberg noted that a new denim mill is being built in Louisiana and that another mill in Texas is seeing a spike in demand for U.S.-made fabrics. Industry leaders said they still don’t expect the market to return to its peak.
The EU imposed the tariffs on American products after President Trump imposed hefty tariffs on steel and aluminum imports from EU-member countries.
Trump and European Commission President Jean-Claude Juncker said last month that they had reached an agreement to work toward zero tariffs.
The president said at the time that they would “resolve” the retaliatory tariffs imposed by the EU, as well as the steel and aluminum tariffs.