I founded Cuts Clothing, voted for Trump. Prices are bad for business

This also deposited test is based on a conversation with Steven Borrelli, founder of Cuts Clothing, in Culver City, in California. It has been changed for duration and clarity.

I was a coherent supporter of Donald Trump.

I supported it in 2016, 2020 and 2024 because I believed that he was someone who was pro-enterprise, pro-family values ​​and pro-no wars. It is the candidate I wanted for the future.

Today I still support Trump. I believe in his “America First” vision. I think that the manufacture of the United States offshoring was a mistake, and I agree with the president that this should be a huge initiative that we should prioritize.

But that cannot be done overnight.

I founded Cuts Clothing in 2016. I was inspired to start a comfortable clothing brand, but still suitable for the office, after my boss in an advertising agency for which I worked gave me a kick of a meeting room because my shirt was not formal enough.

I was about 26 years old. I saved $ 50,000 to start the business with four people and no external funding.

Quick advance six, seven years, I was heading a business with around 30 people, seeing hundreds of millions of dollars in sales. We are now one of the leaders in the athleist space every day and relaxed by direct men.

To compete on the global market, where Chinese resellers reduce costs and to maintain our margins, our clothes are made in Vietnam, China, Peru and the Dominican Republic. By outsourcing production, we get 3 more expensive or third logistics.

Cut the clothes also benefits from a customs settlement known as section 321 of minimis which provides an exemption on the prices for low -cost goods.

This rule is essentially an escape which allows us to send our product to Mexico before reaching consumers, helping us to avoid prices. He survived the previous Trump administration and is that that almost all electronic commerce companies in America use.

Trump’s promise to get rid of this rule and the speed of which he implements prices could make many companies fail.

Like many companies, the cuts began to change production for months before Trump was in office.

We started to move a large part of our production in China and Vietnam and the Dominican Republic around September. However, things take months for the adjustments to settle.

You might have an old inventory that you have not sold a few previous years, for example. We started to move the production in September of last year and we have just received part of our first POS, or order orders, other countries, while we still have the inventory in China of previous orders.

Companies could also use more hearing impaired at the time and the moment when the prices are implemented.

If the prices are there, then there – we cannot make a commercial decision today and do it again if the prices change tomorrow. You have already placed an order. This is a decision that you will have to see for seven or eight months when your order sells it.

So when there is so much uncertainty, we are really afraid to take a step. It makes companies freeze.

Currently, our inventory from China is seated in our distribution center in Mexico because we would lose all margin. We cannot be profitable if we have to sell with 145% prices.

Imagine that you sell a product that costs $ 20 to win and sell it for $ 50. This gives you a margin of $ 30 to cover all the rest of the company, including marketing, operations and payroll.

To maintain our current margin with a rate of 145%, we must now increase the PDSF to $ 79. Even with a price of 30 to 50%, there are major implications for businesses. At more than 100%, it becomes impossible.

I am fortunate to be in the clothing industry because we move quickly. We will be able to manage well, but many companies probably need more than a year to get out of offshore manufacturing.

The revival of American production would also take a few billion dollars in investments for at least two or three years.

There must be a strategic plan to give businesses in America. No one wants to send things and cope with a global supply chain. If it was here, it would be so much better and we would pilot this if we obtained an American subsidy.

But doing this without a very good process is the death of companies.

Again, I always support Trump. I believe that in the end, it will be just for American companies. I think he will understand it and I want to be part of the solution.

My plea is that Trump listens to companies in the field.

Let us help you. We are in the same team.