You know those pricey, slim jeans that flatter ladies', um, backsides? They could ultimately cost even more if you buy them in Europe.
In May, the European Union imposed a tariff of almost 40 percent on American-made premium jeans, which account for 75 percent of the world's designer jeans market.
American apparel leaders now are working to end the duty, which will be a key sticking point when free-trade deal negotiations between the U.S. and EU resume next month. (The temporary government shutdown had postponed the trade talks.)
"We're in the middle of negotiations with the EU," said Steve Lamar, executive vice president of the Arlington, Va.-based American Apparel & Footwear Association. "We've been using the process to pretty loudly and forcefully talk to the U.S. and European negotiators about the problems that occur as a result of this punitive tariff that got put on us."
Though jeansmakers are largely absorbing the duty and have yet to pass along the additional costs to consumers, a lingering tax could hurt U.S. denim exports to Europe—a growing market for American companies. Another potential risk is businesses' moving manufacturing jobs overseas to avoid "Made in USA" labels and thus bypass the European duty.
"The timing [of the tariff] couldn't be worse," said Ilse Metchek, president of the Los Angeles-based California Fashion Association. "The 'Made in the USA' push, we're waking up to the fact that we are no longer manufacturing in the U.S. On the heels of this tariff, it is quite easy to turn on a dime and make it elsewhere. This just chases work offshore."
While no one is pulling jobs out of the U.S. just yet, the EU tax already is hurting profits.
"The tariff has not really affected our European business from a gross sales standpoint," said Samuel Ku, creative director at AG Jeans, based in the Los Angeles area. "The tariff has, however, affected [our] profitability and [that of] our European partners," he said in an email to CNBC. AG jeans retail for $168 and up.
The best-case scenario for U.S. jeansmakers is to end the tax and prevent jobs from moving abroad.
"If the tariff continues, we may have to strategically place production of certain product outside the U.S.," said Ku. "That would be worst-case scenario."