Over the course of their careers, tennis greats Roger Federer and Rafael Nadal went head to head some 40 times. Both players were forced to raise the quality of his game repeatedly, just to compete with his rival. Both will go down as all-time greats in their sport.
Competition making each player greater happens in business as well. By the 1970s, the once dominant American automakers were in disarray, churning out poor and unsafe products that fewer people wanted to buy. However, competition from Japanese companies, including Toyota and Honda, forced the American companies to improve simply to survive.
This was a political challenge at the time. Many called for government restrictions on imports, and Japan voluntarily reduced the number of cars it imported to the U.S. market. Yet the competition ended up being good for buyers and car manufacturers alike. The Japanese moved much of their production to the U.S., employing Americans. Today, drivers now have safer and more reliable cars.
The lesson in both cases: competition is good. That is why free trade, which generates competition across oceans, is generally good as well.
There is an effort in Congress today - being led by the National Council of Textile Organizations - to pass protectionist legislation to impose higher costs on imports from clothing manufacturers. The group praised Senator Ron Wyden (D-OR) for introducing legislation lowering the threshold for de minimis imports that will expand tariffs on imported clothing because competition has “had a devastating impact on U.S. manufacturers,” including the group’s membership. No doubt, politicians have forgotten the lessons of the U.S. auto industry.
The Wyden proposal is marketed as protecting Americans from imported fentanyl, yet the real reason is to protect American textile companies from foreign fashion makers. Before the turn of the century, “American consumers on the hunt for clothing that was trendy-yet-affordable had to go to the mall and shop at trend-driven teen stores such as Wet Seal, Express and American Eagle,” the site Fashionista.com explains. However, “these mall stores were unable to churn out new clothing trends nearly as fast as what we’ve come to expect these days. The inability to keep stores stocked with a huge variety of new merchandise in the span of weeks has led to their rapid demise.”
Their demise, yes. But their replacement with even more responsive, even faster, even less expensive sources of fashion.
These include online outlets like Singapore-based SHEIN. By 2022, the company was generating almost as much revenue as established retailers H&M and Zara, forcing improvements to their business models to remain competitive. SHEIN and companies like it have “created new, cheap, super-fast supply chain concepts that let them instantly adapt to changing consumer trends with quick production and delivery.” They have revolutionized an industry that relied on pushing fashion on customers to a model that caters to the customer’s wants and needs. Also, the company has removed the need for massive stocks of clothing that you frequently see in Old Navy and Gap stores because they quickly make the clothes after they are ordered.
All this competition, which is a direct result of free trade, will be good for consumers. Everyone will enjoy faster access to less expensive fashions. Let’s dare to dream: perhaps Americans might even be able to get seasonal clothing during the season they are in. We may someday be able to buy a bathing suit in August, or a sweater in February (instead of having to do things the other way around).
But free trade isn’t always where politicians turn - especially during the election cycle. The Wyden legislation has drawn the support of at least two Senate Republicans Cynthia Lummis of Wyoming and Susan Collins of Maine. The bill stops small packages of textiles and apparel under $800 from using the de minims classification in an effort to targeting foreign clothing manufacturers directly. Tariffs resulting from the inability of foreign importers to use the de minimis classification impose price increases that are simply passed on to consumers. American consumers will end up paying more rather than getting more.
It is also worth noting tariffs tend to fall hardest on people with the lowest income. If you are working for minimum wage, a tariff that raises the cost of clothing by 10% might be more than you can afford. Meanwhile, millionaires will easily be able to pay 10% more for yet another ball gown or designer suit.
The United States has the greatest economy in the world. American consumers benefit from free trade, and competition improves consumer goods. Politicians should stand back and allow the market to work. Companies like SHEIN will do the rest.
Tennis greats Federer and Nadal used competition to get better. American companies should do the same instead of relying on the government to win the match for them.
Peter Mihalick is former legislative director and counsel to former Reps. Barbara Comstock, Virginia Republican, and Rodney Blum, Iowa Republican.
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