Steven Borrelli, the founder of Cuts Clothing, built his athleisure wear brand from the ground up in 2016.
Inspired by his personal experiences and a desire to create comfortable yet office-appropriate clothing, Borrelli has led the company to great success.
However, alongside his business growth, Borrelli has consistently supported former President Donald Trump, believing his pro-business stance and “America First” agenda could revitalize American manufacturing.
The Foundation of Cuts Clothing
Borrelli’s journey into entrepreneurship began with a vision to create a clothing brand that combined style, comfort, and professionalism.
At just 26, he invested $50,000 into launching Cuts Clothing with a small team and no external funding.
Over the years, the company has grown exponentially, evolving into a leader in the men’s athleisure market, generating hundreds of millions in sales.
Supporting Trump and “America First”
Borrelli has voted for Donald Trump in every presidential election since 2016.
He has expressed strong support for Trump’s “America First” policies, believing that offshoring manufacturing was a mistake.
While Borrelli agrees with the president’s vision for revitalizing U.S. manufacturing, he emphasizes that the shift cannot happen overnight.
The Challenges of Global Manufacturing
To stay competitive in the global marketplace, Cuts Clothing relies on outsourcing production to countries like Vietnam, China, Peru, and the Dominican Republic.
This allows the company to keep costs low, especially when facing price competition from Chinese resellers.
Borrelli’s company takes advantage of a customs regulation known as Section 321 de minimis, which exempts low-cost goods from tariffs.
This rule has helped e-commerce businesses, including Cuts, to avoid high tariffs by routing products through Mexico before they reach U.S. consumers.
However, Borrelli warns that if this regulation is removed or tariffs are implemented too hastily, businesses like Cuts Clothing could face significant financial strain.
The Impact of Tariffs on Business
The threat of increased tariffs looms large for Borrelli.
Under the Trump administration, tariffs on Chinese goods were already a concern, and the possibility of new tariffs or changes to existing ones could cause havoc for many businesses.
Borrelli’s concern lies in the speed at which tariffs are being implemented.
In many cases, businesses don’t have enough time to adjust their production lines, which results in lost margins and unsold inventory.
Cuts Clothing, for example, began shifting production out of China and into countries like Vietnam months before Trump’s policies took effect.
However, this transition takes time, and old inventory still needs to be sold before the new orders from other countries arrive.
The Strain of High Tariffs
As a result of current tariff policies, Borrelli’s company is sitting on inventory from China in Mexico, where high tariffs could severely eat into their profits.
For example, if a product costs $20 to manufacture and is sold for $50, the gross margin is $30.
However, if tariffs push the cost of the product up by 145%, the price would need to increase to $79 to maintain the same margin.
At that point, businesses can no longer remain profitable, as high tariffs make it impossible to sell at a reasonable price.
The Need for Strategic Support for U.S. Manufacturing
While Borrelli acknowledges the importance of shifting manufacturing back to the U.S., he stresses that businesses need more time and support to make the transition.
He suggests that reviving U.S. manufacturing would require billions of dollars in investments and a well-planned strategy.
Offering grants to U.S.-based businesses could help, but Borrelli insists that any effort to bring production back to America must be carefully executed to avoid hurting businesses in the process.
A Call for Cooperation with Trump’s Administration
Despite his concerns, Borrelli remains optimistic about Trump’s pro-business policies.
He believes that the president is ultimately committed to helping American businesses, but that there needs to be a better dialogue with companies on the ground.
Borrelli’s plea is simple: let businesses help shape policies that will create a fairer, more sustainable economic environment for U.S. companies.
Conclusion: Supporting Trump, But Asking for Patience
Steven Borrelli’s journey with Cuts Clothing reflects the challenges many entrepreneurs face in a rapidly changing global economy.
His unwavering support for Trump’s vision of revitalizing U.S. manufacturing is rooted in his belief that the country needs to prioritize domestic production.
However, as a business owner, Borrelli recognizes the need for more time, strategic support, and clear policies to make this vision a reality.
He remains hopeful that Trump will listen to the voices of businesses and work with them to find solutions that benefit everyone.
By addressing the real challenges of tariffs and production transitions, Borrelli hopes to contribute to the broader conversation around U.S. manufacturing and ensure that businesses can thrive in a shifting global marketplace.