In a constantly evolving global economy it can be profitable to keep up with changes in the foreign trade arrangements in order to be able to take advantage of new opportunities as they arise. This is especially the case in businesses like the clothing industry which rely so heavily on import and export for their revenue. In a constantly changing global trade environment, opportunities that weren’t there in the past may be economically viable today. With new free trade agreements coming online in the coming months, the establishment of Foreign Trade Zones (FTZ) and the use of clever tariff engineering strategies, there is potential to boost your profit margin on already existing product lines and to create new, low duty ones.

In the apparel industry the opportunities provided by US free trade agreements (FTAs) with many of the world’s nations are significant. The US has implemented 14 FTAs already, largely in Central and South America, with plans for expanding into Asia and Europe in the immediate future. There are also a range of bilateral agreements between the US and nations in the Middle East, Asia and Australasia which offer substantial savings on import or export duties.

The cost of establishing protocols and systems to take advantage of these opportunities is easily offset by the reduction in costs which can be as much as 20% overall. Another strategy is to engineer your products to attract smaller duties. Rethinking simple details like the fiber ratios in the materials from which clothes have been manufactured can result in significant savings. In one example, a shirt that was made with 51% polyester and 49% silk would naturally attract a duty of 27% while a fabric that was 51% silk and 49% polyester would attract only 7%, providing a hefty saving in import costs without significantly altering the materials costs.

Another area where apparel manufacturers in the US can benefit from the evolution of global trade is by taking advantage of foreign trade zones. These are designated regions in which American manufacturers can, in some cases, have their goods treated by customs as if they were outside commerce. For instance, a clothing manufacturer who imports his material to make items for export can defer, or even eliminate, the duty that they pay for their imported goods. These, and similar import/export strategies offer opportunities to take advantage of the boom in world trade to even the smallest clothing business that can find ways to leverage them.