President Donald Trump‘s Made in America push is prompting some U.S. clothing retailers to expand domestic production of everything from T-shirts to coats and suits, several executives told Reuters this week.

But limited capacity makes a large-scale shift to U.S. production unlikely, and American-made clothing comes at higher cost because of elevated labor expense and tariffs on materials, the executives said.

In a meeting with American CEOs on Tuesday, including the head of Walmart, Trump repeated his vow to cut the 21% corporate tax rate to 15% for U.S. companies making products in the U.S., according to a person familiar with his remarks. He also defended his use of tariffs on imports and said they could multiply.

“We are getting a ton of inquiries from (U.S. retail) brands looking to reshore” by bringing production back to the U.S., said Mitch Gambert, owner and chief executive of Gambert Shirtmakers, a manufacturer of men’s dress shirts in Newark, New Jersey.

His firm supplies woven cotton button-up shirts to three Nordstrom stores, and the department store chain has asked him to boost that to 50 stores by the end of June, he said. Nordstrom did not reply to a request for comment.

At California-based privately-held retailer Reformation, vice president of operations Kathleen Talbot said she is placing more orders with its Los Angeles suppliers as the women’s clothing specialty chain adapts to Trump’s tariffs, and may consider other states like New York and Nevada.

“I believe in the spirit of trying to re-energize or invest in domestic manufacturing, but that’s going to take time,” she said.

Talbot said Trump’s planned tariffs on imports from Mexico, due to take effect in April, left the retailer scrambling to shift its supply chain. Reformation, which sells online and in more than 50 stores in the U.S., UK and Canada, sources clothing from six Mexican factories, all close enough to truck raw materials and finished goods over the border to LA and back.

Joe Ferrara, CEO of New York-based Ferrara Manufacturing, which makes clothing for Ralph Lauren and the U.S. military, said more retailers have approached him to test small-batch, quick-turnaround manufacturing of products such as wool coats and blazers. Ralph Lauren did not immediately respond to a request for comment.

Steve Lamar, president of the American Apparel and Footwear Association, said the industry group expects to see a modest increase in U.S. manufacturing.

“We don’t have the labor, skill set, materials, and infrastructure” to manufacture clothing and shoes on a large scale, Lamar said.

Americans are accustomed to buying low-priced China- and Asia-made clothing. About 97% of the clothes and shoes sold in the U.S. are imported, according to Lamar’s association. China is the biggest source of U.S. apparel imports, though its share has fallen over the past 15 years as clothing production in Vietnam and Bangladesh grew.

The U.S. clothing manufacturing sector has shrunk since 1990 as brands and retailers shifted to sourcing from factories in China, Vietnam, Bangladesh and other low-wage countries, enabling them to keep costs and prices down, said Yao Jin, associate professor of supply chain management at Miami University of Ohio.

“For the apparel industry, very few jobs will come back to the U.S. because our labor is not competitive,” he said.

For Gambert, the potential additional orders for shirts that sell for $300 to $500 represent a major increase for his 100-person factory.

They “would be a definite positive shot in the arm for my business,” he said.

He said about 90% of the 100 workers in his factory earn more than New Jersey’s $15.49 hourly minimum wage.

But Gambert Shirts’ limited production capacity has forced him to take a cautious approach to new retail clients.

“We certainly don’t want to overload it and kick out the existing customer base,” he said.

Gambert’s main competitors are shirt factories in China, Indonesia, Malaysia, Vietnam and India.
Another problem is that materials such as buttons, cloth and zippers are imported and subject to Trump’s tariffs. China is the biggest source of U.S. fabric imports.

Gambert’s button costs have increased 18% because of U.S. tariffs against China.

Alexander Zar, CEO of footwear and leather goods manufacturer La La Land Production and Design in Los Angeles, said he has received inquiries from sportswear brands interested in producing sneakers and running shoes in the U.S. Zar aims to raise $10 million from outside investors to buy new machinery for his 60,000-square-foot (5,600-sq-m) factory and meet increased demand.

In an investor presentation, La La Land markets U.S. manufacturing as a way for brands to “avoid arbitrary tariffs and unexpected supply-chain congestion affected by international geopolitics.”

“While traditional shoe manufacturing in the U.S. may not be able to compete with global prices, localization offers substantial advantages when approached with the right technologies,” Zar said in an interview.

Given that Los Angeles’ $17.28 hourly minimum wage is among the highest in the country, Zar plans to invest in 3D printing and technology that could eliminate the need for stitching on running shoes, reducing labor costs.

Still, Zar said most of the shoes his factory produces will likely be higher-priced or limited edition.
Sportswear brand Adidas, which lists La La Land as a supplier, has no plans to change its supply chain, a spokesperson said when asked whether the company would buy more U.S.-made products. La La Land will produce “a special edition of shoes in very limited quantities” for Adidas, the spokesperson said.

Kim Glas, president of the National Council of Textile Organizations, favors Trump’s additional tariffs on apparel imports from China. But she said tariffs on Mexico and Canada hurt the industry that relies on sending U.S. cotton and wool, yarn, and fabric across borders for different stages of manufacturing. Confusion over tariffs is also unhelpful, she said.

“For U.S. domestic manufacturers to grow and invest, they need long-term certainty.”