Usually I do not get political with this blog. I like sewing, fashion, and crochet and that usually does not throw me into the political arena. This post is a little after the fact, but in light of JoAnn Fabrics campaign to stop the “Made in America Tax”, I feel I really have to say something. First of all, what the hell is a made in America tax?
The answer is simple. There is no such thing as a made in America tax. It is a phrase coined by JoAnn Fabrics to protest tariffs on imported goods from China. The company is trying to confuse the issue by calling a tariff a tax. Legally and structurally they are very different entities. JoAnn is touting the tariff as a tax on everyone who makes and creates things in America. This is blown way out of proportion, it is flaming, alarmist and well, just incorrect.
JoAnn imports many of their goods from China. According to the company, at least 450 of the new tariffs on goods from China will impact products the company carries. To protest this, JoAnn Fabrics is running their made in America tax campaign. They hope that by promoting a doom and gloom situation, they will get an exemption from some or all of those tariffs. Tell small crafting businesses that they are about to crash and burn because of a made in America tax, and you will get a reaction. Inflammatory responses, doomsday scenarios, it’s the apocalypse of the crafting industry. This is the problem with the political climate in the United States. Chicken Little keeps telling Henny Penny that the sky is falling.
What is happening, without the hype, is that tariffs went into effect for a lot of the goods that we, as crafters, use to make our goods. It is a 25 percent tariff. Pretty steep and it will impact the cost of the goods you purchase that are made in China, and other countries too. The tariff is on things like jewelry findings, yarn, cotton, and fabric. Goods from China and other countries subject to the tariffs will cost more. Not immediately, the inventory currently in stores should not be impacted. The company has already purchased them and they should not be subject to a price increase.
What about this “Made in America Tax”? There is no tax. JoAnn Fabrics feels that people in the U.S. who make or manufacture items imported from China, can say that their products are made in America. The company further claims that this tariff is acting like a tax on those items. In reality, you cannot say that your items are “Made in America” if they are made with foreign goods. That is a misleading label and if that is how you are labeling your goods, it will eventually get you into trouble if someone catches it. The legal labeling for something that is assembled or manufactured in America with foreign materials is “Made in America from foreign materials” or “Made in America from imported fibers”. Not quite the same impact as “Made in America” but that is how it should be labeled. To be labeled as “Made in America”, the item has to be crafted or manufactured from materials that were made or grown in the United States. Remember the older garment workers, look for the union label ads, that is “Made in America”.
What JoAnn Fabrics needs to do is to adjust their purchasing model. Either they are going to have to pay the tariff and adjust prices accordingly or they will have to source their products elsewhere. If you are a business and you are purchasing your made in China bulk items at JoAnns, you are doing it wrong. You should be cutting out the middle man (JoAnn Fabrics) and going straight to the companies in China. You can find them on AliExpress or Alibaba.
It is not a made in America tax. It is a imported from China tariff. This will not be the end of the crafting industry. Those who are business savvy will adopt new purchasing and pricing structures to reflect the changes in the business environment. The businesses who refuse to change are the ones that will fail. But their failure will not be due to tariffs, it will be due to the fact that they cannot adapt to an ever changing business environment.