Andrew Chen has thoughts on President Donald Trump’s latest raft of tariffs.
Chen, the founder of the New York City-based fashion brand 3sixteen, took to TikTok on Friday and listed three major ways the tariffs could impact his brand.
Trump imposed a baseline 10% tariff on all imports from all countries on April 2. Some countries were hit harder than others — the European Union was hit was a 20% tariff, Vietnam with 46%, and Lesotho with 50%. Trump raised China’s existing 20% tariffs to 54%.
Chen founded his brand in 2003. It makes menswear basics, specializing in Japanese denim. Most of 3sixteen’s jeans cost between $300 and $400. The brand has two stores — one in New York and another in Los Angeles.
Cost
Chen said the most obvious effect of the tariffs is that costs will increase for 3sixteen. The brand imports materials from three regions hit with tariffs — Japan, India, and the European Union, predominantly Portugal.
“We’re most concerned about Japan because all of our denim is woven there, and then it’s brought over to the States where we cut and sew them into jeans and jackets,” he said in the video.
Trump slapped Japan with a 24% tariff last week. Its trade minister, Yoji Muto, called the measure “extremely regrettable” and said the country would urge the US to exempt Japan from the levies.
Chen said an increase in fabric costs “cascades down at the wholesale and at the retail level.” He said a $10 increase in raw materials could translate to about a $50 increase in the product cost down the line.
“When it gets to retail, somebody has to pay the cost,” Chen said. He added that the brand could absorb the cost, pass it on to the customer, or some combination of the two.
Chen says he now has a shipment of denim arriving from Japan that he’s still figuring out how to price.
“It got put on that boat a month ago, but because it is landing three or four days after the tariffs take effect, we will be liable to pay additional higher tariffs on that shipment,” Chen said.
Uncertainty
Chen said Trump’s tariffs mean he must deal with added uncertainty in his business.
He said he first experienced that heightened uncertainty when Trump announced 25% tariffs on goods from Canada and Mexico in January, only to roll them back for certain goods about three days later.
Chen said 3sixteen uses Jersey fabric knit in Canada. The fleece he uses is also cut and sewn in Canada.
“There was about a month, or a month and a half, where we weren’t sure whether we were going to have to deal with 25% increases,” he said.
Overseas market deterioration
Chen said the third way Trump’s tariffs would impact 3sixteen was through the potential deterioration of its overseas market.
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Chen said retailers outside the US may think twice about stocking up on American goods, adding that he also faced this problem during Trump’s first term.
He said in Trump’s first term, trade tensions between the US and the EU affected his brand.
“It resulted in a lot of stores liking the brand, having bought it for many years, but needing to reconsider their buys, maybe not even stocking the brand outright because it was just getting too expensive,” Chen said.
Chen’s concerns echo those of the retail industry at large. Numerous big retailers, like Best Buy, Target, and Walmart, have said that product price increases are inevitable in the new climate.
In January, BI spoke to the owners of several small businesses, who talked about bracing for tariffs and higher prices by stocking up inventory and placing advance orders.
Chen did not respond to a request for comment from Business Insider.
