Tariff whiplash throws a wrench in brands’ supply chain diversification plans

Jimmy Zollo, the co-founder of Joe & Bella, thought India could be a viable alternative for the online retailer’s China-made socks. The company explored moving production there, drawn by lower costs and a perception that the country was politically “safe” from steep taxes enacted by the Trump administration.

“Pricing seemed great,” Zollo said. “We actually were probably, in the next few weeks, planning on getting a few prototypes made to see if the quality hit our standard levels.”

Then came the tariff news. With little warning, the Trump administration doubled duties on Indian imports to 50%, up from 25%, as part of a push to curtail the country’s purchase of Russian oil. The new rate is scheduled to go into effect on Aug. 27.

The higher rate, combined with manufacturing timelines in India that were five times longer than those offered by Joe & Bella’s existing partners in China, quickly erased any potential savings. 

The company scrapped its India tests. Although Joe & Bella previously manufactured some goods in Vietnam, the company has now consolidated all manufacturing back to China — for simplicity’s sake, according to Zollo. “Anyone could get hit at any time for any reason,” he said. “Sometimes the safest move is just to stay put.”

Tariff whiplash throws a wrench in brands’ supply chain diversification plans – Modern Retail