With the feeling that policy changes are occurring week-to-week, the trade dispute between the U.S. and China will be an issue that fashion execs will be monitoring closely in the coming months.
The latest about-face came Friday when the U.S. government, in a retaliatory move, announced that existing tariffs on $250 billion worth of Chinese imports, including handbags, would rise from 25 percent to 30 percent on Oct. 1.
It also said levies on another $300 billion, which also include apparel and footwear, will now be set at 15 percent instead of 10 percent. Some of those will come into force on Sept. 1.
The rest will be hit with levies on Dec. 15 and the government has indicated that this would give retailers a few months of extra breathing space to stock up for the crucial back-to-school and holiday shopping periods.
In the apparel sector, popular Christmas gifts such as cashmere sweaters and ties — as long as they’re made up of 70 percent or less silk — were among the items included in the office of the U.S. Trade Representative’s December list.
This will not give retailers a huge amount of relief, though, according to the American Apparel & Footwear Association, which is fighting back against President Trump’s claim that his tariff delay on some items protects American consumers during the vital holiday shopping season.
That’s because its analysis found that more than three-quarters of apparel, footwear and home textiles products imported to the U.S. from China will still be hit with an additional 10 percent tariff on Sept. 1 — amounting to approximately $39 billion worth of goods.
Only 23 percent of all apparel, footwear and home textile products imported to the U.S. from China will be hit with an additional 10 percent tariff on Dec. 15. This adds up to $12 billion.
For now, the fashion industry will be watching U.S.-China relations closely. The two sides were meant to meet in Washington, D.C., next month, but it is unclear if that it still happening after Beijing unveiled tariffs on $75 billion of American imports Friday
As well as China, the industry will be watching out for any signs of deteriorating relationships between other countries. President Trump has mooted unleashing tariffs on Vietnam, which is second to China in terms of apparel imports.
And while he has for now agreed not to place levies on Mexican imports into the U.S. after the two sides came to an agreement, this could easily fall apart if the former fails to fulfill one of its pledge to curb illegal immigration at the southern border.
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