When U.S. tariffs were levied in September on $200 billion worth of Chinese imports, some apparel companies saw the writing on the wall even if they wanted to erase it.

The 10 percent tariffs did not cover apparel or footwear, but it did include fabric and handbags along with a threat for more tariffs.

Now a new round of tariffs spearheaded for early next year on $257 billion in trade with China will undoubtedly include clothing. And those 10 percent tariffs are expected to shoot up to 25 percent on Jan. 1.

With change in the wind, clothing manufacturers such as Michael Weisberg decided not to wait for new tariffs to kick in. This year, he started shifting production of his BeBop and Gypsies & Moondust juniorswear labels from China to Vietnam. Last year, 60 percent of that production was done in China. This year it is down to 40 percent, with most of that manufacturing shifting principally to Vietnam and then Cambodia and India.

“This year, our production in China started to decrease as soon as Trump started trumpeting tariffs,” said Weisberg, who is chief executive of Second Generation, the labels’ parent company, headquartered in Vernon, Calif., just outside Los Angeles. “But it is tough because there isn’t enough capacity for everybody to go to Vietnam.”

Because the BeBop and Gypsies & Moondust customer is a more price-sensitive consumer, Weisberg felt the company needed to move to factories outside China to keep prices down. He calculates that additional tariffs will increase the wholesale price by 50 cents to $1 a garment if they go into effect next year. “Our business is moderate and sensitive to any price increases,” he said. “It is not a risk worth taking. Unfortunately, you sacrifice reliability and speed by not being in China. Until this thing blows over, we have to be careful.”

Other manufacturers are waiting before the tariffs take effect to move their production because China is an efficient place to make clothing. All the raw materials and inputs are there as are well-managed factories with decades of experience.

David Vered, president of Los Angeles–based YMI Jeanswear Inc., said about 60 percent of his denim pants and non-denim pants are made in China and the rest are produced in Vietnam. “China is really good at having everything [raw materials],” he said, noting that most of the fabric used for his production in Vietnam comes from China. “But if the tariffs come into play, we will have to move a lot of our production to Vietnam.”

However, Vietnam doesn’t have the capacity to produce the outerwear and swimwear that YMI’s licensees make in China. “That would be a big issue if it comes to tariffs,” he noted.

Another manufacturer waiting to move production is Stony Apparel Corp., whose labels include Eyeshadow and Love on a Hanger. About 80 percent to 90 percent of the Los Angeles company’s collection of dresses, T-shirts, tops and pants for juniors and girls is produced in Chinese factories, said company co-founder Steve Maiman.

But he does have to keep costs down for his price-sensitive customers. “We are looking into alternatives to supplement what we do,” he said. “If we move, it would have to be within a reasonable distance from China, such as Vietnam or Cambodia, because most of the fabric we use comes out of China.”

Moving production can’t be done with the snap of a finger. Most apparel production is planned 12 months to 18 months ahead of schedule, said Elise Shibles, a member of the international law firm Sandler, Travis & Rosenberg. “So current consideration of product placement likely wouldn’t be evident in trade data until over a year from now,” she noted.

To have tariffs or not have tariffs

No one is too clear about whether the Trump administration will expand its tariffs on Chinese products. There will be a clearer indication of what will happen after the mid-term elections on Nov. 6 and after a critical meeting in late November in Buenos Aires, Argentina, of the Group of 20, an international summit of governments and central-bank governors. Chinese President Xi Jinping and U.S. President Donald Trump are expected to meet there and discuss the escalating trade war.

But many are pessimistic about an immediate solution. “We are on track for this thing to happen,” said Steve Lamar, executive vice president of the American Apparel & Footwear Association, a Washington, D.C., trade group that represents the biggest and most important apparel and footwear manufacturers in the United States. “It doesn’t seem like the groundwork has been laid for a breakthrough.”

He has been hearing from manufacturers, both big and small, that they are worried and are seriously considering shifting production to other countries. Vietnam is the preferred country for production, but the country’s factories right now can’t accommodate a sudden big influx of business. “All the new businesses going into Vietnam may drive up costs and create a capacity restraint,” he said.

Taking a more sanguine approach on impending tariffs is Julie Hughes, president of the U.S. Fashion Industry Association, a Washington, D.C., group representing apparel and fashion-goods importers. She doesn’t believe new tariffs are necessarily a done deal. “I don’t think they are going to do anything until the two leaders [of China and the United States] meet. The Chinese are pretty smart,” she said. “I suspect they have a strategy.”

The mid-term elections, she said, will also help to interpret the future of more tariffs. If the Republicans keep the U.S. House and Senate, there will be nothing to hold Trump back from adding more tariffs on Chinese goods. If the Democrats win the House and the Republicans keep the Senate, it may slow things down. If the Democrats win both the House and the Senate, expect a big opposition to tariffs.

But if tariffs are imposed after that November meeting in Buenos Aires, expect the Trump administration in early December to draw up a list of more goods to be added to the more than 5,000 items already on the tariff list. Those new tariffs could go into effect as early as January or February.

“This could be a devastating blow to our industry,” said Vered of YMI Jeanswear. “I hope it is not going to happen.”