Talking Tariffs with CSC…

The world of tariffs is ever-changing and a moving target. We will continue to provide the latest updates and opinions on significant impacts in our industry. The following is based on what we know today. Things are changing at a rapid pace, and we will do our best to update it with the latest facts.

Key Points

On April 9, 2025, a general tariff of 10% was applied to all countries, with exceptions. The 10% is applied when containers arrive at the port.

This general tariff was to remain in effect until reciprocal tariffs were negotiated or for a period of 90 days. The countdown ends on July 9, 2025. At that point, reciprocal (full) tariffs will take effect, varying by country, if no new agreements are reached. The tariff percentage varies by country but could be anywhere from 11% to 50%

Country-Specific Tariffs

China: A combination of tariffs results in a 55% rate on many goods.

Mexico & Canada: Increased tariffs on certain goods, including a 25% tariff on all Mexican imports and other Canadian imports. There are exceptions to the USMCA (NAFTA) for goods such as Signature napery and workwear garments made with Milliken fabrics. Steel Tariffs are at 25%; this directly impacts hangers, equipment, and likely building and construction costs.

Reaction from Suppliers

Initially, when tariffs were announced on April 9, price increases were held off as Suppliers first allowed the current inventory levels to be depleted, and a “wait and see” approach was adopted. Currently, we are at a point where higher-cost tariff goods are the predominant stock in the warehouse of CSC Suppliers. CSC has been receiving price increases from all of our suppliers that rely on imports.

The main direction taken by our Suppliers has been a line-item tariff surcharge. This allows for the proper identification of the cost driver and for the Supplier to make modifications as the conditions change.

In discussions with our Primary suppliers, we would see the surcharge become a permanent cost increase if the tariffs were to become permanent.

Tariff calculation on cost can be complicated; it is based on the value of the goods, not the total cost. We are seeing the impact be from 3% to up to 10%, depending on Supplier sourcing strategies and accounting practices.

Secondary Conditions that Impact Pricing

Cotton: Currently trading at $62.27 today, this is very close to a 5-year low, a COVID-19 price. Post-COVID cotton reached $158 per pound; we are now down about 60%, which has brought down the cost over the last two years.

This price change is driven by crop production and global demand; as the economy appears to be cooling, cotton inventories are growing, which is lowering costs. Opinion: barring natural disasters, we expect cotton to remain lower in cost and be stable for the foreseeable future.

 

Oil: Currently trading at $65.58 per barrel; this has been volatile due to the Iranian issue, but it is almost at a 5-year low. COVID oil reached below $20 per barrel; we are now down about 60% from the post-COVID high.

In May 2025, we achieved a price lower than $60.00 per barrel, but that was short-lived due to the conflict in Iran. In comparison, last year, we averaged over $70 per barrel. With no significant changes to global politics, this administration’s push for more exploration should help keep costs down and stable.

This directly impacts the cost of polyester, chemical costs, and transportation costs from overseas. The time of actual impact varies; we would need to see at least 90 days of consistent pricing to drive the bottom-line cost of our products.

 

Trade Agreements: In the process of being reviewed and renegotiated, one item on the table is AGOA (Sub-Saharan trade). This would impact suppliers that produce in Africa; however, there is no solid news at this time on the potential impact.

Can Textile Manufacturing Come Back?

1. Cost Disadvantage: Labor costs in the U.S. are significantly higher than in countries like India, Vietnam, or Bangladesh. Compliance costs related to environmental regulations, water usage, and chemical controls also add expense.

2. Infrastructure Gaps: The U.S. has lost much of its textile manufacturing infrastructure over the past few decades. Restarting it would require significant investment in factories, equipment, supply chain logistics, and skilled labor.

3. Time & Planning: Building and obtaining permits for a textile facility can take years. Site selection, workforce training, and regulatory approvals all add to the timeline and complexity.

What Would It Take to Reshore Manufacturing?

1. Government Incentives: Tax breaks, subsidies, or grants for companies willing to build and operate domestic facilities. “Buy American” initiatives or local sourcing mandates could boost demand.

2. Automation & Innovation: Advanced manufacturing (robotics, AI-driven production lines) could help offset high labor costs.

Technology could make U.S. production more cost-competitive with overseas factories.

3. Regionalization of Supply Chains: Instead of reshoring everything, companies may seek to “nearshore” production to Mexico or Central America to reduce reliance on Asia. This option could eventually support regional textile hubs that feed into U.S. manufacturing and distribution.

4. Strategic Investment in the Workforce: Trade schools and technical training programs for textile and industrial workers. Rebuilding knowledge and skills lost to offshoring.

Signs of Possible Change

Some brands are relocating parts of their production back to the United States due to supply chain disruptions, consumer demand for “Made in USA” products, and geopolitical risks.

Certain niche and high-value markets (like performance apparel, uniforms, or military textiles) are more viable for domestic production due to quality control and customization needs.

Conclusion

Bringing textile manufacturing back to the U.S. is possible, but it won’t happen quickly or broadly without intentional policy, private investment, and technological innovation. The market may start with small, strategic sectors rather than a full-scale return to mass production.

What Happens to U.S. Cotton?

1. Grown Domestically – Processed Overseas: The U.S. is one of the world’s largest cotton producers, especially in states like Texas, Georgia, and Mississippi. However, most U.S. cotton is exported — over 80% in recent years — to countries like China, Vietnam, Bangladesh, and Pakistan, where labor and processing costs are lower.

2. Turned into Finished Goods Abroad: That raw cotton is spun into yarn, woven or knit into fabric, dyed, cut, and sewn into finished products — such as t-shirts, jeans, towels, and uniforms. The final goods are often re-imported back to the U.S. to be sold in retail or wholesale markets.

3. Niche Use Within the U.S.: A small share of cotton is kept in the U.S. for specialized or niche manufacturing (e.g., American-made clothing brands, military or institutional uniforms, high-end products). These products usually carry a “Made in USA” or “Grown & Sewn in America” label, which can command higher prices.

Why Isn’t More Cotton Used Domestically?

The cost of U.S. textile labor and processing is significantly higher than that of overseas production. Many U.S. textile mills have closed in the past 40 years, leaving limited infrastructure for converting cotton into finished goods. Lastly, global supply chains are designed for efficiency and scale, making it challenging for U.S. facilities to compete with overseas mega-factories.

Future Outlook

If reshoring efforts succeed (even partially), there could be an uptick in domestic cotton-to-fabric processing. Sustainability concerns and rising overseas costs may encourage the use of regional or domestic cotton. Brands that emphasize traceability and local sourcing are more likely to keep U.S. cotton in the country.

Current updates from Suppliers on price changes due to Tariffs

R3: Due to imposed tariffs R3 Reliable Redistribution is increasing pricing on their soap auto dispenser in white and black and their hand roll towel dispenser in white and black

Venus: Instead of June 15, we will implement our increase by July 15. We will be implementing a price increase of up to 10% on most product categories, in response to tariffs. We will share the price list with CSC prior to the effective date.

Pinnacle: Due to tariffs there will be a surcharge will be of 4.9% on all categories effective 6/16. The surcharge may be higher on custom orders or private label inventory depending on the product category or timing of a particular order. This surcharge may be changed up or down based on current events,

but we will continue to communicate any changes in advance.

Indy Hanger: Effective July 1: Hanger prices will increase by $3.00 per case. This equates to approximately $0.0060 per hanger

ADI: A surcharge date of 8.5% will be effective as of June 16 and will be applied as a separate invoice.

Ammex: As of July 1, prices on all products will increase with a specific increase dependent on the product.

Fresh Products: Effective July 1, Fresh Products will be implementing targeted price adjustments to two product categories directly affected by recent tariff changes:

· Dispenser products will increase by 20%. Metered aerosol canisters will increase by 8%.

 

Disclaimer: The information provided in this update reflects the thoughts and opinions of Jeff Landry, CSC’s Executive Director, and is based on publicly available sources. It is intended solely for the purpose of education and providing value to CSCNetwork members. This content should not be interpreted as legal, financial, or policy advice.