Normally headlines and news from the business pages stay on the business side, and the motocross apparel industry merrily plugs away, minding its own business. But things get a little weird when U.S. quotas on Chinese-made apparel get thrown into the equation.
A couple weeks ago we started hearing rumblings from some very unhappy apparel manufacturers. It all revolved around category 647 of U.S.-imposed textile safeguard quotas, or more specifically, “man-made fiber trousers”—what most people would generally consider slacks destined for your local department store. These quotas are designed to help protect the U.S. textile industry from less-expensive imported Chinese goods. Unfortunately, as far as the the textile safeguard sanctions and the U.S. government are concerned, that currently also includes motocross pants.
A similar quota was set in place before, but as one manufacturer told us, after it was lifted early in ’05, “The U.S. brought in more textiles in five months than in all of 2004, so the quotas were put back into place…and a lot of companies got caught with their pants down.” All puns aside, another manufacturer told us, “Once the quotas were reinstated, it has been chaos.”
So who’s involved? Pretty much all the MX apparel companies producing goods in China (which means nearly everyone) have to deal with this.
While some manufacturers are reluctant to talk about the issue, one product manager told us, “Our purchasing department saw the writing on the wall, and they were able to get a jump on production and get a very substantial amount of our riding pants into the country with little to no issues. Since the quota restriction, we have turned to other countries to get some of the pants made.” In talking with several manufacturers, this sounds like a common theme, as they look for less-restrictive paths to get products produced and shipped into the country while waiting on word on when the quotas might be modified, the pants reclassified into another category. Many of the manufacturers that we spoke to felt that the products were incorrectly categorized.
What makes all this particularly tough is that you have to consider the timeline involved. When you factor in construction, shipping, warehousing…all without even having to find new sources of manufacturing, and an impending holiday season, it’s easy to see why it’s a touchy subject. As our manufacturing source told us, “I don’t think people realize how long it takes to produce riding apparel. The pants have become so technical, and involve so many different manufacturing processes, that they take a very long time to produce. Then on top of that you have to account for shipping (in most cases be up to three weeks on the water), and then it still has to clear customs, get inventoried into our warehouses all over the country. Just to put it into perspective we are already head deep in 2007 designs!”
In the meantime, negotiations have been ongoing between the Chinese government and U.S. negotiators. The most recent negotiations on the topic of a broad bi-lateral textile agreement with the Chinese government took place in San Francisco on August 16th and 17th. The U.S. side included negotiators from The Office of the U.S. Trade Representative (USTR), which covers everyone from the Department of Commerce (DOC), to the Department of State, Department of Labor, and the Treasury Department. While no agreement was reached, it sounded like everyone was hopeful that a deal could be reached soon.
In the end, this will hopefully produce very little drama for consumers, though it’s definitely caused the manufacturers to scramble behind the scenes. All we know is, motocross is capable of producing plenty of its own drama and politics, and it sure is weird when it gets caught up in the real world of international politics.