How U.S. - Made T-Shirts Compete

American Giant's item turns a profit at a price of just $12.98 at Walmart

- SUZANNE KAPNER

Walmart aisles are piled high with goods this holiday season, but one item sticks out: cotton T-shirts that were made in America and cost $12.98.

The U.S. is awash in a sea of cheap imports that has destroyed much of the domestic apparel industry. In 2023, less than 4% of the apparel purchased in America was made here.

Seeking to turn the tide, Donald Trump imposed tariffs in 2018 on Chinese imports during his first term as president and has proposed additional tariffs on all imports in his second term, including items from neighboring Canada and Mexico.

But it wasn't tariffs that made the $12.98 shirt economically feasible, says Bayard Winthrop, the chief executive and founder of American Giant, the U.S. apparel company producing it. It was Walmart's heft and guaranteed orders.

The country's biggest retailer - and importer of consumer goods - pledged in 2013 to buy more items that were made, grown or assembled in the U.S. In 2021, Walmart increased its goal and promised to spend billions more each year through 2030. More than half of Walmart's sales come from groceries, most of which are produced domestically.

Winthrop said that without Walmart acting as a backstop by committing to buy a predetermined number of shirts over time, American Giant's suppliers wouldn't have had the confidence to make the investments in automation and other upgrades that drove down production costs. A Walmart spokesman confirmed that the retailer essentially signed noncancelable purchase orders.