The renegotiating of the North American Free Trade Agreement offers a chance to aid America's oldest suit maker at its mill in Cleveland, Tennessee, owner Allan Jones said Wednesday.
Jones, owner of Hardwick Clothes in Cleveland, said he is hoping a new trade agreement can be struck to offset the competitive disadvantage U.S. makers of high-end clothing face in paying a 25 percent import duty from fine fabrics and wool from Italy that apparel makers in Mexico and Canada don't pay.
To offset that difference, Jones has appealed to the Trump administration to impose a 25 percent import duty on piece goods made from such fine fabrics coming into the United States.
Jones said the trade agreement with Mexico announced this week "has given us a ray of hope," although he said he has not seen the details of the Mexican agreement and Hardwick is in most need of a workable arrangement with Canada where most of his competitors are now based.
Any new agreement still is subject to ratification by the U.S. and Mexican Congress.
"The president has given a lot of people in our situation a lot of hope," said Jones, an early and consistent backer of Trump. "This is a big mess and Trump is trying to straighten it all out."
But relief will require that trade negotiators strike a deal with Canada. Jones also wants some help from Congress in creating a fairer way to redistribute the import duty fees paid which are partially rebated back to the industry.
Because of the higher import duties imposed in the United States compared with its neighbors to both the north and south, "there is a real penalty to building in America," Jones said.
Wool import duties have been imposed by the United States since 1824 to protect U.S. woolen mills. Those mills largely have closed, but Hardwick Clothes remains as a 300-plus employee suit maker in Cleveland. The 108-year-old company is the oldest suit maker in the country and, since Jones acquired the company in 2014, the Cleveland businessman has pumped millions of dollars into it and recruited top executives from rival firms to run the business.
Part of the money collected from the U.S. import duties on wool comes back to the Wool Trust Fund. But the allocation of the money from that trust fund to clothing makers is based on 1999 sales, not current sales. As a result, Hickey Freeman and Hart Schaffner Marx — Hardwick's biggest rivals — get the bulk of the money even though their sales have dropped significantly in the past two decades, Jones said.
"That becomes a huge subsidy for our competition, and that makes it hard," Jones said. "To make it even, they need to pay on what they did last year, not historical figures."
With the right change in trade and trust policies, Jones said Hardwick Clothes could grow significantly in Cleveland.
Contact Dave Flessner at email@example.com or at 423-757-6340.