‘Made in USA’ wasn’t goal as Trump sought cloth­ing deal

The Washington Post - - FRONT PAGE - BY ROS­ALIND S. HEL­DER­MAN AND TOM HAM­BURGER

Don­ald Trump wanted to mar­ket a line of men’s cloth­ing that would bear his name.

He told peo­ple work­ing with him to help find a com­pany known for pro­duc­ing high-qual­ity mer­chan­dise on a mass scale. In the end, Trump signed on with Phillips-Van Heusen, a man­u­fac­turer of af­ford­able shirts pro­duced in fac­to­ries in 85 coun­tries.

The 2004 deal— one of the first of many mer­chan­dise-li­cens­ing ar­range­ments in which Trump at­tached his name to prod­ucts made by for­eign work­ers and sold in the United States — is rel­e­vant to­day as the bil­lion­aire busi­ness­man wages a pop­ulist pres­i­den­tial cam­paign in which he ac­cuses com­pa­nies of killing U.S. jobs by mov­ing man­u­fac­tur­ing over­seas to take ad­van­tage of cheap la­bor and lax work­place reg­u­la­tions.

Doc­u­ments and in­ter­views re­veal the per­sonal role Trump played in ne­go­ti­at­ing the deal. Par­tic­i­pants said they could not re­call him ex­press­ing a pref­er­ence that prod­ucts be made in the United States.

“Find­ing the big­gest com­pany with the best prac­tices is what was im­por­tant to him,” said Jeff Danzer, who was vice pres­i­dent of the com­pany hired by Trump to bro­ker the deal. “Find­ing a com­pany that made in Amer­ica was never some­thing that was spec­i­fied.”

To­day, Don­ald J. Trump Col­lec­tion shirts — as well as eye­glasses, per­fume, cuff links and suits — are made in Bangladesh, China, Hon­duras and other lowwage coun­tries.

Trump’s daugh­ter Ivanka, a vice pres­i­dent at his com­pany and a fre­quent cam­paign sur­ro­gate, mar­kets hun­dreds of ad­di­tional prod­ucts un­der her own line of jew­elry and cloth­ing. Many are made in China.

The con­tra­dic­tion be­tween Trump’s busi­ness de­ci­sions and his political agenda il­lus­trates the some­times-awk­ward trans­for­ma­tion of an ag­gres­sive, profit-ori­ented mar­keter and real es­tate mogul into a fire­brand cham­pion of the strug­gling work­ing class.

When Trump be­gan cut­ting li­cens­ing deals more than a decade ago, many busi­ness ex­ec­u­tives and politi­cians in both par­ties ar­gued that free trade and over­seas pro­duc­tion were ben­e­fi­cial to ev­ery­one— a needed boost for poor, de­vel­op­ing economies abroad and a path to cheap goods for middle-class con­sumers in the United States.

Trump, though, has emerged as the Repub­li­can pres­i­den­tial front-run­ner largely by tap­ping into grow­ing anger among vot­ers who think free-trade poli­cies — such as the ones that have added to Trump’s for­tune — have devas- tated U.S. com­mu­ni­ties that have lost man­u­fac­tur­ing jobs to Mex­ico, China and else­where.

Trump’s ri­vals and crit­ics say he is a hyp­ocrite, en­rich­ing him­self with over­seas la­bor while blast­ing the prac­tice for political gain.

Rep­re­sen­ta­tives for the Trump Or­ga­ni­za­tion did not re­spond to re­quests for com­ment, and a spokesman for Ivanka Trump’s prod­uct line de­clined to com­ment.

On the cam­paign trail, Trump has blasted Ford Mo­tor Co. for open­ing fac­to­ries in Mex­ico, crit­i­cized a U.S. drug com­pany that moved its head­quar­ters off­shore and said he will eat no more Oreo cook­ies be­cause its maker, Nabisco, moved part of its pro­duc­tion to Mex­ico.

When news broke three weeks ago that the air-conditioner maker Car­rier was mov­ing 1,400 jobs from a plant in In­di­anapo­lis to Mon­ter­rey, Mex­ico, Trump wrote on Face­book: “We can­not al­low this to keep hap­pen­ing. It will NOT hap­pen un­der my watch.”

More­over, Trump has men­tioned la­bor con­di­tions over­seas in sup­port of his po­si­tion that goods should be made in the United States, telling CNN last year that Chi­nese la­bor­ers are “paid a lot less and the stan­dards are worse when it comes to the en­vi­ron­ment and health care and worker safety.”

Dur­ing Thurs­day night’s Repub­li­can can­di­dates’ de­bate, Trump said he knows how to fix the poli­cies that en­cour­age out­sourc­ing be­cause he spent so many years tak­ing ad­van­tage of them.

“No­body knows it bet­ter than me,” he said. “I’m a busi­ness­man. Th­ese are laws. Th­ese are reg­u­la­tions. Th­ese are rules. We’re al­lowed to do it. . . . But I’m the one that knows how to change it.”

Trump’s ri­vals for the Repub­li­can pres­i­den­tial nom­i­na­tion have tried — so far to no avail — to un­der­cut his pop­u­lar­ity among work­ing-class vot­ers by por­tray­ing him as some­one who ram­pantly out­sources jobs. A sim­i­lar line of at­tack proved ef­fec­tive four years ago against then-GOP nom­i­nee Mitt Rom­ney.

Sen. Marco Ru­bio (R-Fla.) called on Trump dur­ing a March 3 de­bate to an­nounce that “all the Don­ald Trump cloth­ing will no longer be made in China and in Mex­ico but will be made here in the United States.” Trump dis­missed the no­tion, ar­gu­ing that China’s cur­rency poli­cies “make it im­pos­si­ble for cloth­ing mak­ers in this coun­try to do cloth­ing in this coun­try.”

Crit­ics say Trump is be­ing disin­gen­u­ous.

Robert Lawrence, a pro­fes­sor of trade and in­vest­ment at Har­vard’s John F. Kennedy School of Govern­ment, has re­viewed Trump-brand prod­ucts for sale on­line and found that a large per­cent­age are im­ported.

For ex­am­ple, the web­site sell­ing Ivanka Trump’s mer­chan­dise line links to 838 prod­ucts — 628 of them im­ported. Of those, 354 are from China, a coun­try that Don­ald Trump of­ten says takes ad­van­tage of the large U.S. trade deficit.

Ivanka Trump’s prod­ucts also were mar­keted along­side her father’s on the Trump Or­ga­ni­za­tion web­site. But amid crit­i­cism last week of the fam­ily’s out­sourc­ing prac­tices, his daugh­ter’s page was re­moved.

“I don’t de­cry what he and his daugh­ter do,” said Lawrence, who served on the Coun­cil of Eco­nomic Ad­vis­ers un­der Pres­i­dent Bill Clin­ton. “But at the same time, for him to claim that this is some­how im­moral and go af­ter com­pa­nies that have re­lo­cated man­u­fac­tur­ing when he has done the same puts him in con­flict with his own rhetoric.”

Lawrence said that some of Trump’s pro­pos­als could hurt his own busi­nesses. His pro­posed 15 per­cent tax on com­pa­nies that out­source jobs, or a pro­posed 20 per­cent tax for im­port­ing goods, could re­sult in higher prices for con­sumers buy­ing Trump-brand prod­ucts. Re­cently, he has dis­cussed plac­ing a 45 per­cent tar­iff on Chi­nese im­ports.

Lawrence es­ti­mated that Trump’s $250 suits made in China would sud­denly be priced in the United States at $350 or more. “The im­pact would be stag­ger­ing and wide­spread,” he said.

Michael Strain, deputy di­rec­tor of eco­nomic pol­icy stud­ies at the con­ser­va­tive Amer­i­can En­ter­prise In­sti­tute, said that Trump’s trade rhetoric is “deeply ir­re­spon­si­ble” be­cause iso­lat­ing the U.S. econ­omy could dev­as­tate busi­nesses and hurt con­sumers.

Trump struck the 2004 deal with Phillips-Van Heusen, which owns the Tommy Hil­figer and Calvin Klein brands, at a crit­i­cal mo­ment for his brand— the same year his hit show “The Ap­pren­tice” premiered.

Sev­eral peo­ple en­gaged in the ne­go­ti­a­tions said that Trump was per­son­ally in­volved. None could re­mem­ber him specif­i­cally men­tion­ing the U.S.-worker is­sue.

“If he’s con­cerned about jobs in the United States, it should have been a ques­tion he asked,” said one per­son in­volved in the deal, who spoke on the con­di­tion of anonymity to avoid of­fend­ing Trump. “And I can tell you that in none of the meet­ings did it come up.”

The shirt­maker used fac­to­ries in some coun­tries, in­clud­ing Bangladesh, China and Hon­duras, where la­bor vi­o­la­tions such as forced over­time are com­mon, ac­cord­ing to Scott Nova, ex­ec­u­tive di­rec­tor of the Worker Rights Con­sor­tium, a group that mon­i­tors fac­tory con­di­tions.

The agree­ment signed by Trump and Phillips-Van Heusen placed no re­stric­tions on where Trump dress shirts, tuxedo shirts and neck­wear could be man­u­fac­tured.

Phillips-Van Heusen agreed that any prod­ucts “man­u­fac­tured by it or for it any­where in the world” would not be made us­ing child la­bor “as de­fined in the rel­e­vant ju­ris­dic­tion of pro­duc­tion,” ac­cord­ing to the con­tract, which was filed in a later law­suit in New York be­tween the bro­ker com­pany and Trump.

Mark We­ber, who was chief ex­ec­u­tive of Phillips-Van Heusen at the time, said the com­pany em­ployed a “global sourc­ing net­work” to pro­duce clothes for Trump’s line and other brands.

We­ber de­scribed Trump as a mas­ter ne­go­tia­tor who cor­rectly pre­dicted the brand would be a smash­ing suc­cess and per­suaded a wary Phillips-Van Heusen to sign on.

In a de­po­si­tion filed in the New York law­suit, Trump re­called that the mas­sive cloth­ier had been ea­ger for the deal. “They were very hot to make a deal with us,” Trump said, ac­cord­ing to a de­po­si­tion tran­script pro­vided to The Wash­ing­ton Post by Jay Itkowitz, an at­tor­ney for the bro­ker com­pany that un­suc­cess­fully sued Trump.

We­ber, who is sup­port­ing Trump for pres­i­dent, said he con­cluded at the time that Trump was a pa­triot.

“He had a clear pref­er­ence to sup­port Amer­i­can val­ues and what was good for Amer­ica,” We­ber said.

Asked whether Trump ever specif­i­cally ex­pressed a pref­er­ence for items bear­ing his name to be made in Amer­ica, We­ber said, “You’re ask­ing me for specifics that are very hard to rec­ol­lect.”

We­ber said that at the time, the in­dus­try’s widely shared goals — pro­moted through over­seas pro­duc­tion — were to im­prove stan­dards of liv­ing for work­ers in de­vel­op­ing coun­tries and to of­fer U.S. con­sumers lower prices.

“That was a time when Amer­ica was very much in fa­vor of build­ing a bet­ter life for the peo­ple of our hemi­sphere,” he said, re­fer­ring to fac­to­ries in Cen­tral Amer­ica.

“While we care about Amer­i­cans, we care about peo­ple all over the world, too,” We­ber said.

He also said that Trump never at­tempted to re­quire that prod­ucts be made in the United States as part of the con­tract be­tween the two com­pa­nies.

“No one can tell us where to make our prod­ucts,” said We­ber, who left the com­pany in 2006. “I have never signed a con­tract in my 40 years of ex­pe­ri­ence where some­one could tell me where to make my goods.”

Af­ter Trump drew scru­tiny over the sum­mer for dis­parag­ing com­ments about Mex­i­can im­mi­grants, Macy’s, which sold his cloth­ing line, an­nounced it was end­ing its re­la­tion­ship with him. Phillips-Van Heusen, now called PVH Corp., quickly fol­lowed suit, say­ing that its li­cens­ing deal with Trump would be un­wound.

Dana Perl­man, a spokes­woman for the com­pany, said last week that it no longer man­u­fac­tures Trump cloth­ing. She de­clined to com­ment fur­ther.

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