For pranksters of a certain age, Fraser Smeaton is a hero. With his brother, Ali, and former roommate, Gregor Lawson, the Scottish business leader is the founder of Morph Costumes. Morph is a UK costume company that launched a twist on the zentai full-body spandex suit in 2009 and spawned a legion of viral videos. When the GAP store on Fifth Avenue was ‘morphed’ by a band of improv-artists in 2018, the police had to be called. The accompanying video received millions of views.
Morph Costumes’ biggest market is America, particularly around Halloween, when children from Detroit to West Palm Beach like nothing better than ghost outfits and fake blood. Smeaton—who runs the company from its Edinburgh headquarters—is now an expert in global tariff policy and the negative impact of economic volatility and barriers to trade. The President should give him a call.
Morph Costumes is a Main Street example of tariff effects. It makes its costumes in China, which has a 30-year start on the rest of the world in the business of clothing production. Moving production elsewhere is prohibitively expensive.
Since Donald Trump entered the White House for the second time, the US import taxes faced by Morph, which supplies Walmart and Target, have lurched wildly—from zero tariffs to 20% tariffs to 50% tariffs, before briefly flirting with 145% tariffs. The figure fell back to 20%, before the Supreme Court intervention last week ruled the tariffs illegal, which brought them back down to zero. The President then announced a new 10% tariff, although there is some confusion about whether he actually means 15%.
“It is certainly not good for investment,” Smeaton tells me, with the wry understatement common to Scots. “Or for the US consumer. They are paying higher prices.” Morph Costume’s outfits now cost 9% more, after Smeaton’s business was hit by a $3 million duty bill, wiping out most of its profits.
Higher prices for witches’ outfits may not cause a riot is the aisles of your local supermarket, but they do contain a lesson. Tariffs (a tax on goods) raise money for the US government (bills fall due in seven to ten days, Smeaton told me). They also push up inflation across all goods affected,