Emily Lane, Bret Schnitker
October 24, 2022
Emily Lane
Welcome to Clothing Coulture. I'm Emily Lane.
Bret Schnitker
I'm Bret Schnitker.
Emily Lane
We speak with experts where we explore the global dynamics that shape trends in the fashion industry,
Bret Schnitker
brought to you by Stars Design Group, a global production and design house with over 30 years of industry experience.
Emily Lane
Welcome back to another episode of Clothing Coulture. Today we are going to be exploring the woven fabric of global business and fashion. Bret, welcome back.
Bret Schnitker
Thank you.
Emily Lane
Glad to have another conversation with you on this really timely topic.
Bret Schnitker
Yeah, definitely.
Emily Lane
You know politics have been shaping conversations in a very heated way, for some time.
Bret Schnitker
Maybe forever, but pretty much a lot more engaging over the last four years.
Emily Lane
Absolutely. And even at the office. Yeah, we're constantly finding ourselves and trenched debate and conversation, which is really healthy. I think it's important to foster these conversations. But it really talking about the impact that fashion or politics have had in the fashion industry over recent years?
Bret Schnitker
Sure.
Emily Lane
It's quite an interesting topic to explore.
Bret Schnitker
Definitely, I think when you look at politics, I don't think politics have ever been more divisive. Politics at its heart is a unique construct. Right. And I think then, when we look at what's happened recently, what's happened over the year in the last number of years, we have to ask ourselves, is the direction that politics going healthy for us as Americans or us as global citizens. And I think that there's probably a lot of evidence to suggest that there needs to be a new way look at how we think of our politicians, some of our politicians, and how we construct a return to politician as a civil servant, return to someone that you believe has the best interests of America at heart.
Emily Lane
You mentioned being a citizen of the world. And we talk a lot about being a global company being globalist. And the fashion economy is a global economy. What are some observations of things that you've seen over the last several years? how some of those decisions and some of the various things that have had an impact on the global nature of this industry?
Bret Schnitker
Yeah, nationalism to me, in its current framework, that has crept up a number of countries. One, it's probably not a super intelligent construct. We are a connected world. You can't go back and certainly in America, thinking that we can separate ourselves from the world. One is a very dangerous conversation, because our economy depends on a robust trade, but we have no infrastructure to support it, nor would we have an infrastructure. And that in itself has been troubling me for a long time. America has been a leading light in the world. Therefore, being a leading light, the currency in which the world trades with is the United States currency. There are a lot of reasons for that. But one of the main reasons is America has been a global leader to brands in news there, we talk about what our exports are, and what are our chief exports. Big ones are airplanes from Boeing, or where the breadbasket of the world is pretty understandable. But in traveling the world, one of the things that I think exists that we don't talk about so much are our brands. It is the I don't know the development of the American way that comes through these brands that that the world has embraced, right are one of our number one exports, in my mind is our brands, everything from Hollywood, Disney to Starbucks, and Coca Cola. It seems so second nature to us but when you travel, I remember being in Pokhara in Nepal. And this is I'm really literally in the middle of subtropical Himalayas. And I would go there to escape occasionally. And there's this beautiful lake, you stay on this little island lodge called the Kings Island, and you can take boat rides out onto the lake and they've got a Buddhist temple and the chance come over the water at night, just a very peaceful, idyllic place in the Himalayas is, and I can remember, I thought it was incredible in the middle of this nowhere place, that would have literally no economic impact to any degree, there was this trade war going on between Pepsi and Coke. And they would pay I don't know how much you know, whatever, somebody rupees or whatever, Nepalese dollars, I don't remember the currency the time but to have the boat captains, rowboats or whatever, paint the side of their boats with Coca Cola. And then the next day, some other group would come and pay them a little more to repaint it with Pepsi Cola. And I thought, what an interesting concept that our branding had had gone so deep into some of these very, very rural places,
Emily Lane
middle of a very small, people village.
Bret Schnitker
Yeah, so I think it's, you know, and like you mentioned, we don't really think about it. I always have a dialogue about our brands. And I talk that you go into the grocery store, and you go to the garbage bags section, that's one of the most base products in the world, right? branding should really have no relevance, you're putting garbage and you're throwing it away. And we're all intelligent people, most of us, we can read the sides. You read the mill, the mill weight of the plastic, you see that the constructions are the same, and there's a no name brand, sitting next to Hefty
Emily Lane
Some are heftier your right
Bret Schnitker
we ended up buying Hefty the over this no name brand, everywhere. And I think that is this evidence, that that we have developed a real sophistication for branding that the rest of the world that many parts in, in the rest of the world, or certainly European countries that really get branding really well, obviously, in our business, some of the most exclusive brands in the world come out of EU and Europe, right. And so, but I think for Asian nations, etc. This is a relatively new concept. They have their own form of advertisements you travel, but they've never developed these global brands like America has. And I think we think we want to walk back away from the rest of the world, we don't want to continue to be what America has been, we have to understand the ramifications. And I think a lot of the ramifications could be damage to our economy in that way.
Emily Lane
And talking about being a part of this global economy. Often you have, in previous conversations on our podcast, you've talked about America having abandoned manufacturing many years ago. Sure. How can America benefit in a free trade agreement?
Bret Schnitker
Yeah, it's basically these brands. I believe there are many things that America still has a lot of strength with certainly technology, planes, breadbasket a brand, like I mentioned before, this is a trade balancer, as long as you know, we've done some damage to ourselves globally, rightly. America has this way of kind of stumbling its way through, and then hopefully, finally getting things right for a time. When I've traveled to all these different places, Everywhere I go, there's these American brands are prevalent, even in a country like China, which, the current administration considers us, I don't know, enemies, or whatever the case may be. I'm traveling to real rural parts of China. There's Kentucky Fried Chickens, there and there. Starbucks on corners of every major city and Coca Cola and Pepsi all the way through. And I think we have to recognize this rhetoric that's going on, and the harm that it can harm could potent potentially play we have opened we have provided an opportunity for a country like China, to develop manufacturing to support many sectors that we've walked away from our could not support because of our labor's or labor costs. And they've picked it up and done very, very well with it.
Emily Lane
And they're a very important part of the fashion economy.
Bret Schnitker
They're an important part of a number of economies that are existing for America. They were our lifeline during COVID, PPP and masks, etc. And so, you know, when we talk out of one hand, that there are enemies, we can talk that there another country, they're still human beings. In a in the nature of an economy, there are people that will want to build and build a robust economy and take advantage of whatever opportunities that are sitting there to build a better economy. And you can't blame them for that we probably as Americans have done that a number of times over the, the number of decades. And there are things that we need to have checks and balances internationally, certainly China has been has violated, you know, intellectual property.
Emily Lane
Right
Bret Schnitker
Situations globally. When we put all this kind of in a bucket, and we think our solution is tariffs. It's again pretty faulted thinking, and it's certainly the numbers have borne that out.
Emily Lane
Right, ultimately with those tariffs it's the consumer that ends up really suffering.
Bret Schnitker
Very few people believed that China was going to pay the price for the tariff. The truth is, is this year, we will have a higher trade imbalance with China than we've ever had before tariffs 75 billion highest trade imbalance with China since 1981.
Emily Lane
So a trade imbalance. What do you mean by that?
Bret Schnitker
So internationally, we look at different countries, and we manage trade balance, export versus import. Okay, so what are we exporting? What are they buying from us? And what are we buying from them? And ideally, there should be in a simplified world, people think there should be a trade balance, right? There's a lot of economists that say, hey, a trade imbalance to a degree actually benefits us. But we don't have time in this conversation to go through. But that is its nature is that there's this, there is this kind of number that says, hey, we're being fair with each other. We're exporting grain food to China, and they're exporting to us. Apparel-
Emily Lane
Right
Bret Schnitker
fashion, things like that. And among a number of other things, but I think when that's what I mean, in terms of a trade balance. And when there was this kind of position of fear put out with China, and the solution, whichever economists would tell you never works is tariffs. The result is, is that the American consumer paid more paid more for goods that came in from China. And where did those dollars go that what a lot of average citizens don't understand what tariffs as they think, because some of our politicians have said it is a penalty against China.
Emily Lane
Right, that they're the ones that are paying
Bret Schnitker
That's not the case it when a good comes in from overseas. For a long time, we have had things called duties that everyone around just to really understand that duties are percentage of the cost of the garment that we pay the US government to import those things. And a lot of those duties at one point were to balance trade to make things balanced. Protecting domestic production. Today, it's an income stream for the government, right.
Emily Lane
It not trying with in the case of apparel, we're certainly not trying to protect our manufacturing.
Bret Schnitker
Yeah, right. There's not a time. And tariffs are simply another layer of duty. When we as an importer or brands as importers buy something from China, they come in, they pay the basic duty, then they pay an additional tariff, that a penalty additional tax for importing those goods. Well, we as an importer, or a brand or anyone else that's bringing goods into the country from China, they pay that to the government, but we have to maintain profitability. Prices go up to cover that cost that the government is now charging to import. And so ultimately, the US consumer pays the penalty. And in paying that penalty, those dollars flow through air to the government.
Emily Lane
Right.
Bret Schnitker
In this case, it's been faulted the Americans, consumers paid more, we in the apparel industry in the shoe industry have had higher costs for import, and the trade imbalance has gone up, right, China has increased their volume of business with us.
Emily Lane
Which is only going to perpetuate some of these conversations that are flaming the fear mongering, and certainly, right, they're gonna be more of a threat.
Bret Schnitker
Human beings are human beings, nations are just groups of human beings. So, there are things that nations will do even us against other nations that we would consider harmful if we were living in that other nation. Things like the G-12, GA, you know, that that entire group, I think those are a very effective means of deterrent and managing, you know, international trade, etc. I know, for a long time, China worked very, very hard to become members. And I think that they put in place certain things that China needed to do to become a member.
Emily Lane
Such as
Bret Schnitker
Internal monitoring, there were all sorts of financial things going on, I'm not a genius in that area. But I know that they, it took them a number of years to come into compliance. That they become they can become members. If China is unfairly doing a business practice against any other country, including the US, one of our options could have been, hey, there's intellectual property rights violations, you can threaten expulsion from that. And that could have been a more effective way. Meeting human to human having conversation, the Chinese are deeply invested in the US. And our long-term bonds and, US businesses, etc. So, there is this unique balance that China has put on themselves to not have America destroyed, economically. So, there are a lot of things we should really think about when we're walking down this road.
Emily Lane
I'm curious about learning a little more about some of these global initiatives that are in place to help kind of foster fair trade. I think we were talking earlier today about TPP. And,
Bret Schnitker
yeah, the Trans Pacific Partnership, that that is an extension of an early agreement is made between 12 nations, and we think Trans Pacific we think, they're all nations in Asia, which isn't the case. I mean, Chile was a member, Peru as a member, Mexico, certainly United States. And then groups like Singapore, Vietnam, Malaysia, Australia, New Zealand, 12, in total, sorry, if I left any out. That was a Yeah, Japan, for sure. That was a that was an arrangement to help foster more open trade and reduce barriers to trade. And while there were different viewpoints on that, I felt like it put America in a really good position. With these countries, and certainly in a geopolitical situation, we would become closer allies and trading partner with some of the newer members of that. But, when in 2007, we had signed that in, I think, February 2016, and the current outgoing administration sort of banded in 2017. I think a lot of that was this rhetoric of fear, trade imbalance. I'm concerned that we walked away from something that would have given us strength in that in those regions with those countries. And now in the vacuum of us walking away, China's stepping right in and considering becoming a member of the Trans Pacific Partnership that we abandoned and really worked on for a number of years.
Emily Lane
Do you think there's opportunity to get back?
Bret Schnitker
There's certainly always opportunity. The question is, is timing desire? I think that politicians have had a very, very loose, many politicians not all let me rephrase that have had a very loose term of facts lately. And I think that it's incumbent on future administrations to really do the deep dives, and really do their deep research and provide facts to the American consumer about the benefits and the possible risks of every business venture. There's risks and opportunities. And I think, in this one, that would be the case, too, but I think we need to be engaged globally as the world and that was an opportunity to do so.
Emily Lane
Common thread in this conversation is that, you, we're humans, we're all interconnected, even if just through humanity. But you've had many stories of bringing people together from different cultures, different communities, different countries, and finding great love and kinship and capacity to work really, really well together in this industry. Yeah. And I'd love for you to share some insights, the values there. How many people?
Bret Schnitker
Sure. I think, you know, we've talked about before that, certainly lately, a lot of politics has been building walls. And I think that, at least in my experience with, I think sound ethical business relationships where both parties sort of win. I think that helps to tear down walls. We hear on the news that Pakistan and India are at odds and enemies and that Muslims are against Christians, and religious factions, etc. And I remember a time I spent three years working in some large factories in the north of Ethiopia, when we were literally in the middle of nowhere. It was one of the largest facilities that I had ever worked in, it was fully vertical. There are 3200 workers on the floor, I think there were well over 4000 people in the, in the one particular factory and all sectors, so it's spinning, weaving, knitting, dyeing, cm, cutting the whole work. And they had brought in a consortium, the factory itself, the Ethiopian factory itself, about a consortium of people from around the world, to help in different areas. And then we are working on large process there had our individuals from different offices around the world, and there wasn't a bunch to do. So, you worked long hours, then he kind of walked about a mile and a half back to this compound that we would all hang out on in the evening, and around the dinner table. There was certainly if we were political, that was certainly an opportunity to have some pretty heated conversations. We had Indians, Pakistanis, Muslims, Christians, Jews, Buddhists, the walks of life from all different countries,
Emily Lane
All different economic backgrounds,
Bret Schnitker
and I couldn't help on some evenings kind of look around the table. And I said, if we were in some political arrangement, or structure, this would be a really tough room, and because we were all committed and working together, in our industry, trying to accomplish this common goal of exporting apparel, we really became Brothers in Arms. And I remember one night it hit me extremely strongly that we had had a guy, good friend, he we brought him over from the Korean office, James was probably 60 he looked 30 he looked really young and fed and, and we came back one night, we started eating and I think James had a low blood sugar issue and stood up and then collapsed to the floor, passed out and
sweat. And everyone was kind of shocked. And you know, we're in the middle of nowhere. So, if I was going to be something serious, that's not gonna be good for James. But before anyone else could do anything, there were two guys from Pakistan, Muslim religion, where in America we've been, you know, there's been a lot of rhetoric directed unfortunately toward Pakistan and Muslim face and others and, and these two guys jumped up really quickly. They grabbed James now James, he had now for the purposes of the conversation, he's an Asian Buddhist.
Emily Lane
Okay, right.
Bret Schnitker
So again, conflict among religion, maybe if we were in a political environment or whatever, but they grew up time off the floor, they pulled him over to the couch, they recognize pretty quickly that he had, you know, just a low blood sugar issue. One quickly had someone run over a cold rag, they cradled him in in their laps, and put a cold rag on his head. And they basically sang to him for about an hour and a half or two hours. And it was the most astounding view of care that I had ever seen in kind of this camaraderie but business environment. And it struck me that the deficiencies we have when we listen to politicians that some politicians that if they can unite you against a common fear, then they draw you closer to themselves, because they're the salvation and in reality, we're human beings. That what I've seen over the years is that in my business businesses can break down barriers that that politics lately have created. And I think it's an important lesson to learn that our future and our responsibility as citizens of the Earth is to create the synergies where we all thrive and get along, because the choice is probably not a good one, if we can't sort that out. And I think we did drive our politicians to understand that,
Emily Lane
yes, it's frustrating as our politics can be, we have to try as hard as we can to not let them interfere with kind of a better good.
Bret Schnitker
Yeah, I have hope that that people are, are understanding of some of those things. But within America, one of the challenges that we've got is that we, as many Americans don't travel a lot. And so they are naturally sort of centrically focused, they think that that there are these kind of situations around the world that could impact them negatively. And I think, really understanding. I say I'm a globalist, and people sometimes say, Oh, that's a bad word, people segment view is not being America centric. I am America centric, I believe that America is a great country. But the reality is, as America is built of immigrants from all over the world, we cannot forget that we are a melting pot. And much like that. That story I told you about Ethiopia. That's story in Ethiopia is an expanded version of what America is a condensed version of what America is expanded today. I mean, look around, right, we have all these races and religions and backgrounds, there isn't, quote, American, we are, we are a melting pot of the rest of the world. And I think it's important for us, using that awareness and understanding our history and background to continue to be a good steward and participant in the world.
Emily Lane
Yeah, I completely agree with that. And I also, I kind of heard a hinge when you were talking about traveling. And, of course, now with, COVID still being among us, as it is today, traveling isn't practical. But once we are free to do that do so again, I think travel is a really excellent way to introduce yourself to other parts of the world and trying to see things through a different lens.
Bret Schnitker
Yeah. And I think very quickly, these fears that people bring up, there's a big bad world out there and we kind of forget in our back in our situation. We've got a lot of things that other nations look at and go, Oh, my God, look what's happening in America. And I think if you get off and get on a plane and go start to experience the world, you will find that people are people. They have families that they love and things that they care about, and there is good, bad and ugly in every nation. Oh, absolutely. That it's not such a scary place. It can be a really fascinating place.
Emily Lane
Yeah, I agree. Well, thank you very much. I appreciate a fascinating conversation in the dynamics of politics and fashion. This very topic navigating the global sup supply chain and the complexities that come in line with that is something that we are really passionate about helping our clients and others in the industry navigate. So, if we can be of any help to you, please feel free to reach out at Stars Design Group or at Clothing Coulture.
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