How Trump’s Proposed Border Tax Could Change Shopping Mexico-Made Brands

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Last week, the White House proposed a 20 percent import tax on Mexico-made goods as a possible way to pay for the southern border wall that Donald Trump has been promising since his presidential campaign. Though it remains to be seen whether such a tariff will actually go into effect, it would have an immediate effect on clothing brands like Forever 21, 7 For All Mankind, Paige Denim, Frye, Hudson Jeans, and Levi’s, which are among the companies that produce at least a portion of their goods in Mexico.

It would affect their shoppers, too. Levi’s, Hudson Jeans, Frye, Paige Denim, and 7 For All Mankind declined to comment on Trump’s proposed tax, but three designers of small fashion brands that produce in Mexico say that US customers would see an import tax of 20 percent reflected in their products’ price tags.

“Really, the consumer will be the one to suffer,” says Jack Miner, the founder of the Mexico City-based and -produced menswear line Hecho. “Our prices would go beyond our target price point.”

For a young brand that’s still finding its fanbase, that could deter shoppers altogether. Currently, the only fee incurred from selling Hecho across the US border is the standard cost of shipping.

Andrea Vargas Dieppa of Dieppa Restrepo, a shoe brand sold at stores like Totokaelo and Steven Alan, sees a possibility of negotiating lower rates with her Mexican factories in exchange for not moving its production elsewhere and out of the country, should a high import tax go into effect. In that scenario, the manufacturer could absorb some of the added cost and minimize the price hikes inevitably transferred to customers.

Dieppa has called Mexico City home for ten years. She first came out to Mexico as a store location scout for American Apparel, and a pair of shoes that she found there inspired her and her business partner, Elisa Restrepo, to track down the factory that made them. In 2008, the two women founded Dieppa Restrepo, with Restrepo living in New York and Dieppa in Mexico City, where she oversees production.

But while Mexico is a fundamental part of Dieppa Restrepo’s origin story and business operations, it’s not necessarily integral to its brand identity: Dieppa and Restrepo are both Colombian. Should Trump’s border tax prove too challenging for their business, Dieppa says they would conceivably relocate manufacturing elsewhere.

“What else are you going to do?” Dieppa says without hesitation.

Dieppa and Restrepo have already begun the process of sourcing certain shoes in Peru, since their Mexican factories weren’t capable of making those styles. If they suddenly have to factor a new import tax into their prices for Mexico-made shoes, Dieppa says, they might also explore moving production to countries that were previously too expensive and don’t have exorbitant tariffs, like Portugal and Italy.

Photo: Anadolu Agency/Getty Images

Brands whose identities are more geographically linked may have their hands tied when it comes to production, however.

“This is scary for us because we committed to production in Mexico,” say Phoebe and Annette Stephens, the sisters behind the jewelry brand Anndra Neen, over the phone.

Born and raised in Mexico, they both moved to the US for school and now run their business out of New York. All of their jewelry is handmade in Mexico in an Anndra Neen-owned workshop that employs eight craftspeople; when the Stephens sisters were setting up their operations, they decided manufacturing would be more reliable if they cut out a middleman and owned the means of production themselves. They have an apartment in the same building where their studio is located.

The Stephenses say they’re waiting to see what happens with Trump’s proposed border tax, but if it goes through, they’ll have to sit down and figure out how it will impact their prices. It likely will.

More immediately, they say they’re concerned about the tensions between Trump’s US and Mexico that the proposed import tax represents. It is, after all, intended to pay for the border wall Trump has been promising since his campaign, during which he said that Mexican immigrants are bringing “drugs” and “crime” to the US, and that “they’re rapists.”

“We try not to mix our business with politics that much, but in this case, how can you stay silent? As people and also as Mexicans, living in the US and having benefitted so much from the US, you feel like it’s the first time that you’re feeling that animosity,” the Stephens sisters say.

Photo: Francois Durand/Getty Images

At Art Basel in Miami after the election, they received a report from an assistant who was selling their jewelry that, after she told a customer that the cuff they were trying on was handmade in Mexico, they promptly took it off and said, “Forget it.”

“We travel so much and we buy things everywhere and appreciate handmade craft, but for them, [made in Mexico] was a deterrent,” they say.

Hecho’s Jack Miner says he hopes that Trump statements about and policy regarding Mexico will incentivize customers to shop Mexico-made clothing in a show of solidarity and “in retaliation to Trump’s ignorance.” The Stephens sisters agree that this kind of backlash would be wonderful, “but that’s best-case scenario.”

Miner moved to Mexico City from New York, where he had been working at Chris Burch’s venture capital firm, in 2012 with his husband, who is originally from Mexico. They hadn’t planned to stay for longer than a year, but Miner, a Connecticut native, fell in love with the city. In 2014, he launched Hecho, which makes its simple, color-saturated basics, bags, and shoes at three factories in Mexico City.

“Trump and his administration are so volatile that I wonder if something as aggressive as this tariff would be imposed in the end, particularly in light of the fact that it’s a product of Trump needing to find a way to pay for the wall that he’s promised,” Miner says. “It’s hard for me to conceive of it actually happening that way, or at that number, at 20 percent. Maybe something less severe.”

Photo: Hecho

Miner says he’s not panicking yet, but he’s monitoring the situation. Still, the possibility of an import tax has encouraged him to think about shifting his sales focus away from the US. Hecho largely sells direct-to-consumer through its website, but in September, his first season talking to department stores and boutiques, Miner got a particularly strong response from European and Japanese buyers.

“But in light of this Trump reality, it’s becoming increasingly more sensical to look to Europe and Asia as markets to focus on, since we’re such a nascent brand,” Miner says. “That’s not going to deter us from pursuing accounts in the US, but Trump is definitely something to be aware of.”

Marika Vera, a Mexican lingerie designer who lives in Mexico City and sells to Journelle and the Museum of Sex in New York, says that she’s doubled down on growing her national business since Trump was elected. Vera had been planning to hire a PR and sales agent in the US to grow her business in the States, but between the strength of the dollar and Trump’s tariff proposal, she decided to use her resources to open a small storefront in Mexico City’s Polanco neighborhood instead.

“I went for investing in my country, based on the instability of the future,” she says.

Vera is still planning a trip out to New York to build relationships with boutiques there, but she’s waiting to see what happens with Trump to make any major business decisions.

Despite her concerns that Trump has given US citizens the impression “that because you’re white and American you have the right to be racist,” she looked upbeat over a Skype call on Wednesday.

“I think things have to collapse to a certain extent for people to react. This whole stupid Trump thing has made people open their eyes and expand their consciousness,” Vera says. “As a Mexican, seeing the Women’s March was amazing for me. How cool that there is still some hope in this democracy.”