As we investors eagerly read up on the telecommunications and biotechnology industries, there are many other, less exciting, industries we tend to ignore. Bill Mann recently covered one of them as he praised Cemex
Perhaps we shouldn't. The American sock industry is up in arms about competition with China, fearing that it might unravel in the face of too many inexpensive socks being imported. According to a CBS MarketWatch story, "The Bush administration has decided to consider a request from the domestic sock industry to impose quotas on imports of Chinese-made socks and will make a final decision on the matter just before the November presidential election, the Commerce Department said Wednesday."
It seems that whereas we imported fewer than 12 million pairs of socks from China in 2001, just two years later, in 2003, we imported around 264 million pairs -- that's nearly one pair of socks per pair of feet in America. American sock makers are claiming that the Chinese sock makers are able to price their socks especially low because of subsidies they enjoy and they're therefore making it hard for Americans to compete.
The textile industry overall is a tough business, especially in America. Just ask Warren Buffett, who bought a struggling textile company called Berkshire Hathaway
The CBS MarketWatch article noted that, "In November, the Bush administration capped the growth rate of Chinese lingerie imports on such products as brassieres, nightgowns and knit fabrics." (Economist Alex Tabarrok of George Mason University scratched his head about this as he typed, "there is no domestic bra industry to protect.")
So who actually makes socks in America? Lots of people in Appalachia and the Southeast, among other places. And a bunch of familiar corporations. For starters, there's Sara Lee
The takeaway for investors is that though we may wish the U.S. textile industry well, we may do best to avoid investing in it. There are more attractive investment propositions elsewhere. And if all this talk about socks makes you wonder where you should sock away your short-term savings, consider these options for your emergency money and other funds.
Longtime Fool contributor Selena Maranjian owns shares of Berkshire Hathaway.