I am CEO of American Giant. Us Trade needs reset.

This test also filed is based on a conversation with Bayard Winthrop, founder and CEO of the American Giant, clothing manufacturer based in California. The interview was published for duration and clarity.

I had a career to manage small companies to make consumer products.

At first, I really took the libertarian economic thought of the Chicago school to heart. I felt that all the trade was a good business and that the movement of manufacturing abroad was what you did and had a financial meaning, so I followed this script.

Over time, what started to appear on me is that I became more and more disconnected from the product I sold, and I really hated this feeling.

I also hated that I was working with these people who helped me get business and then, because I could get a game that was stamped for 10 or 15 or 20 cents cheaper, I could reduce my work rates.

When I had my first daughter in 2010, I didn’t want to do it anymore. I had this notion quite naive to start the American giant.

I grew up in the 1970s and 80s with the big brands of American clothing like Levi’s and Wrangler and Champion and Red Wing and Woolerich. Not only did they make the best products and clothes in the world, but I also felt that they had said something about me when I worn them. They were substantial.

In 2010, there were no more clothing brands like that. They had all shipped abroad.

I launched with a male sweatshirt, because I was just interested in this category, and a press article called it “the largest hooded sweatshirt”.

This article has gone mad. He brought us into a back status for almost three years, and that convinced me that there was a real demand from consumers for that.

The last 40 years have been really bad for the middle work class

When you live in a place like San Francisco, where I do, and you are surrounded by people with a university diploma, like me, and you have been on the stock market, life looks rather beautiful.

But if you live in a rural or urban community, and you have a secondary school diploma and you do not have stocks, the last 40 years have been really bad. I think it sets up a bad framework for the country, and I think we have to do something.

American Giant was my little way of trying to create a business which, in my opinion, contributed and did the right thing.

With the textile industry in particular, the United States has essentially taken a very robust and rapid modernization industry and essentially stopped it in its footsteps.

In 1970, something like 95% of all clothing bought by Americans was made in America. Now it’s less than 5%, so the bottom falls from this market.

What remains is a very sort of disaggregated supply chain, which means that you will have a yarning operation here, a death and finish operation there, a knitting operation there. If you want to have production at the national level, you must support all this separate and atomized production, which makes things more difficult.

In China, you can go and say that you need 100,000 purple t-shirts with ruffles on the sleeves, and you will have 20 tender factories.

We really had to enter the supply chain, assemble it ourselves, in many cases, and keep it together. It has become much easier now because our volumes have grown up and now we are not the only ones.

It’s more difficult and it’s more expensive, but I think the quality is much higher because you can just get closer to the source. It is certainly not the simplest way.

There are a lot of misunderstandings on what is possible here

You can absolutely, especially in knitwear, make very high quality knits and very large volume in the United States – most companies have just forgotten how to do it.

Instead, we have trade agreements which are to various degrees of bad or less than Ideal. I think China is downright in the very bad area.

US trade must be fundamentally reset.

Trump’s prices have pushed all this conversation in the middle of the country, which, I think, is a good thing.

The country finally has solid DC conversations and on Main Street on what is wrong with our trade relations and what must be repaired. This was not part of the national speech eight years ago. It’s now.

The fact that we are aggressively, in my opinion, China is a good thing.

As the pandemic has shown, if they deactivate supplies like medical masks or medical dresses, it is very bad for the country, and it endangers the country.

On the other hand, I think that the way the administration has communicated it was very disjointed.

People say that Trump is a master negotiator, and that everything can be true, but for large and small private companies, it is very destabilizing. When companies in the private sector have the impression that things are unpredictable or unstable, it freezes capital and people stop moving – and stop investing.

There will be ramifications of the supply chain for the current approach, and therefore the speed at which it will take place will be difficult.

There are still a lot, many things we are counting completely on China, such as pipe fittings, that we hold for granted and the economy works. What happens if these become two or three times more expensive for small, medium and large people who provide our plumbers?

I don’t like instability. I don’t like the threat of speed and the extent of this kind of thing. And I certainly don’t think we have to deal with, you know, our sympathetic allies, as, let’s say that Canada and Vietnam, in the same way as we are dealing with China.

These are very, very different situations and should be treated as such.

The United States has been the world capital of knitting for a very long time

The United States is still a net cotton exporter.

Our main thread supplier is a net exporter of wire. There is a lot of cotton and thread to manage the company that we could launch on the American supply chain. Dying and the finishing capacity would be good. It is really at the very end – sewing, which is the most manual step in the process – which would take some time to turn.

We now have a t-shirt program at Walmart which is a very large volume, and we had no problem responding to this request, and it could quadruple the night quite easily. And it’s just a little old American giant.

So there is a lot of knitting capacity here, and a lot of cotton and thread capacity to manage any type of increase in volume.

A large part of the textile machines come from Korea, Japan, Germany, Switzerland and Italy, which raises an interesting question: why does it arrive in the United States compared to manufacturing here?

The question of skills is also very interesting. We do not have people who want to fill some of these jobs.

How to convince people to come here instead of working in a quick restaurant? We will train you at the seamstress, we will give you 40 or 50 hours a week, you could learn a lot, you can grow. I think it will happen, it will just take a little time to answer.

Rebalancing trade will involve certain compromises

I believe that if the net effect of these prices is that we have to pay a little more for a T-shirt and this leads to an increase in labor rates for people who live in places like Middlesex, North Carolina, I will take this compromise.

The speed at which all this happens, however, I think it will create problems.

I hope there is this change to better -quality things close to you that offers good viable work to people who need it. If the effect of this is that average Americans should start to be a little more aware of how they consume, I will take this job.

It should not become such a crystallized and polarized discussion. This should be important to all of us as a lover. We cannot build a country that has half the country on the stock market and managing very well, and the other half has trouble finding work. It just doesn’t work.

We are not going to rewind the clock in the 80s, and we are not going to come back to a place where everything we consume is made here.

But between there and where we are now, there is a more rational common ground which, I think, will reinject a certain vitality in these communities which need work.