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Patagonia Is Cracking Down on Making Logo Vests for Wall Street Banks and Tech Startups

(Bloomberg) — Patagonia Inc. is cracking down on the corporate logo vests that have become wardrobe staples on Wall Street and in Silicon Valley.

The outdoor gear maker won’t create the products for just anyone through its corporate sales program. Recently, Patagonia has shifted its focus to “mission-driven companies that prioritize the planet,” the company said in a statement late Tuesday. It has made gear for all kinds of companies in the past, from big banks to nonprofit organizations.

Patagonia said it wants to add more companies that have the B Corp designation to its client list — businesses that meet certain environmental, social and transparency standards and are certified by a private organization. Patagonia itself is a B Corp and some financial and technology firms also have that status.

The company declined to share exactly when the changes were enacted, but current customers shouldn’t fret. Existing corporate customers will remain in the program and still be able to order more branded items from Patagonia.

Fleece and puffer vests or jackets from Patagonia with a company logo have gained a reputation as a go-to corporate uniform in the finance and tech worlds, an odd turn for an outdoor brand that sells everything from wetsuits to sleeping bags.

Word of the change spread when Binna Kim, president of the coincidentally-named communications agency Vested, shared on social media Monday an email from a third-party supplier of Patagonia’s corporate garments after it tried to order items for a client and said it was rejected.

According to the email from the unidentified supplier cited by Kim, Patagonia was reluctant to sell co-branded gear with companies they consider “ecologically damaging,” such as the oil and mining industries. It also singled out religious groups, political-affiliated organizations and financial institutions.

Late last year, Patagonia updated its mission statement, saying, “We’re in business to save our home planet.”

Half-Empty Shelves. Skyrocketing Prices. Here’s What Would Happen to the Produce Aisle if Trump Closes the Mexico Border

Most fresh fruit and vegetables imported during the winter months could disappear from grocery store shelves across the U.S. within a matter of days. The produce left behind would skyrocket in price by at least 20% to 40%. Cucumbers, eggplants, bell peppers, squash, cherry tomatoes, watermelons and other warm-weather fruits and vegetables Americans enjoy during cold months would become scarce. And you can all but forget about avocados.

That’s the stark warning from experts and industry advocates if President Donald Trump follows through on his threat to close the southern border if Mexico does not stop the flow of undocumented Central American migrants into the United States. It’s something that would impact almost anyone in America who buys fruits and vegetables, says Lance Jungmeyer, the president of the Fresh Produce Association of the Americas, a trade group.

“Shelves will start looking half-empty within a few days, and within a week, they really are half-empty,” he says.

The President has flipped between pulling back on his warning to Mexico and doubling down on his efforts. During a speech at the National Republican Congressional Committee’s annual spring dinner Tuesday evening, Trump claimed Mexico was cooperating in apprehending migrants at the border. “I really wanted to close it. But now Mexico is saying, ‘No, no, no.’ First time in decades,” he said.

By Wednesday, Trump had seemed to have changed his mind, tweeting that without action by Congress, the border, “or large sections of Border,” will close.

Trump’s continued threats have highlighted how intertwined the $557 billion trade relationship between the U.S. and Mexico is, particularly when it comes to the food supply. About 50% of vegetables and 40% of fruit imported to the U.S. are grown in Mexico, according to U.S Department of Agriculture data.

U.S. consumers accustomed to year-round access to fresh fruits and vegetables are reliant on Mexico’s produce supply. Much of the produce normally available to American buyers in the off-season would disappear if the border closes, according to Jungmeyer. While southeastern states like Florida and Georgia could grow many of the warm weather vegetables during the winter months, they are not able to grow enough to feed the entire country — largely due to the threat of frosts, freezes and hurricanes. Plus, it would take domestic farms six to eight weeks, or longer, to ramp up production of their crops, from planting to the first harvest. While existing crops could be added to the food supply in the wake of a border shutdown, they would not come “anywhere close to meeting the gap in demand,” Jungmeyer says.

Not having access to produce from Mexico would also cause fresh fruit and vegetable prices to jump anywhere between 20% and 40%, according to Jason Grant, an agricultural economist at Virginia Tech. He bases his estimate on past price increases during events that shut down borders to certain products, such as beef and pork. But fruit and vegetable imports from Mexico are so integral that closing the border would have unprecedented consequences for the U.S., he says.

“This would be significant,” says Grant. “I have not seen anything like this in terms of the importance Mexico has to the fruit and vegetable market.”

The trading relationship between the U.S. and Mexico is so intricate that many grocers supplement their U.S. produce with imports from Mexico throughout the year, depending on consumer demand, says Richard Owen, a vice president at Produce Marketing Association, which represents companies that supply fresh produce and flowers. Furthermore, many U.S.-based agriculture companies, such as Driscoll’s or Mission Produce, grow their products in multiple countries, including Mexico — and a shutdown could hurt their stateside operations.

“This disruption may be perceived as impacting just Mexican growers, but these are U.S. companies,” Owen says. “The ripple effect is directly to U.S. businesses that employ people and supply product into the U.S. marketplace.”

Grocery retailers across the country are already preparing for a scenario in which they cannot get fruit and vegetables from Mexico, Owen adds.

Jungmeyer, who works near the border in Nogales, Az., says more than half of the local economic output is related to fresh produce flowing between Mexico and the U.S.

“Our economies are so intertwined, people would understand within a week or so how this is impacting everybody,” he says.

‘Bad policy’: U.S. aluminum bosses slam tariffs, say quotas are risky

Top executives from the U.S. aluminum industry say substituting quotas for import tariffs will squeeze supply of the metal, making it “harder, even impossible” for American companies to grow and invest.

The United States has been pushing Canada and Mexico to accept quotas in exchange for lifting the tariffs on steel and aluminum imposed by U.S. President Donald Trump last year.

That strategy — which Mexico City and Ottawa have resisted — risks creating shortages that disrupt supply chains and tie up funds that would otherwise be used for business investment, said Jean-Marc Germain, chief executive of Amsterdam-based Constellium N.V. which operates a number of facilities in the U.S.

“We know aluminum regularly crosses the border multiple times before reaching an end user as a finished product,” Germain told reporters following a spring meeting of the U.S. Aluminum Association, representing aluminum firms including Alcoa, JW Aluminum, and Scepter Inc. “Under a hard quota system, that metal could end up stuck at one side of the border after the quota has been filled.”

Speaking on behalf of the association, Germain called on Trump to scrap the tariffs, arguing they represent “bad policy” and have done little to stop the “trade distorting behaviour” of China while increasing costs for downstream producers who represent 97 per cent of the jobs in the sector.

A recent study by the Organisation for Economic Co-operation and Development found China provided its aluminum industry with subsidies in excess of US$70 billion between 2013 and 2017 — 85 per cent of which went to five firms. The overcapacity has been blamed for depressing prices and pulling production away from U.S. producers.

“The real issue on the world stage with aluminum and fair competition is China,” Germain said. “The rest of the world is by and large playing by the rules. … That’s why we’re saying a targeted action against those players in China who don’t play by the global rules is the solution to our problems. “

While antidumping and countervailing duties — which target unfair trade in specific products from individual countries — have proven successful in thwarting dumped goods, the same cannot be said of the tariffs, the association maintains. China’s primary aluminum capacity rose by nearly 6 per cent in 2018 despite the levies and its production rose in the second quarter of 2018, around the time they were applied. Meantime, the levies boosted the cost of aluminum from Canada, the largest supplier to the U.S. market.

“What you have in the antidumping and countervailing duty tariffs is an ability to take that targeted approach versus the section 232 which is a much more blanket or broad approach and I think that’s where we would draw the distinction,” said Michelle O’Neill, senior vice president, global government affairs and sustainability for Alcoa.

The stated goal of the U.S. tariffs — issued on national security grounds under Section 232 of the 1962 Trade Expansion Act — is to increase America’s self sufficiency in steel and aluminum production by lifting capacity utilization above 80 per cent in both industries. Though the steel industry has now surpassed that marker, U.S. aluminum smelters are unlikely to move above 60 per cent this year, said John Mothersole, director of pricing and purchasing at IHS Markit in Washington.

By contrast, Canadian aluminum producers who supply 47 per cent of the metal consumed in the United States are currently operating at above 90 per cent capacity, despite the tariffs.

Analysts say investment south of the border remains hindered by the high cost of operating in U.S. currency and the challenges of competing with Quebec producers, who benefit from access to cheap hydroelectricity.

“The U.S. primary producers have lifted production somewhat but not as much as the administration would have liked,” Mothersole said, adding that U.S. aluminum prices are now the highest in the world. “If you make metal in the U.S., the tariffs can be good I guess but if you make things out of metal, not so much.”

The White House is facing mounting pressure from business groups and senior Republicans and Democrats to drop the tariffs before Congress considers ratification of the new NAFTA. Canada and Mexico have also said they will not ratify the deal with the tariffs in place.

“We remain very much opposed to quotas and tariffs because all that would do is hinder our growth by capping how much we can export to the U.S. which is our natural market,” said Jean Simard, president of the Aluminum Association of Canada. “Quotas micromanage trade and we won’t support that.”

• Email: npowell@nationalpost.com | Twitter:

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