Fashion is in danger of suffering a serious case of whiplash amid the ever-changing tariff landscape.
Nevertheless, investors appeared to like the latest turn of events, with a number of retail stocks posting strong gains after the U.S. government announced it would delay imposing 10 percent tariffs on some items until Dec. 15, giving retailers a few months of extra breathing space to stock up for the crucial back-to-school and holiday shopping periods.
The administration had previously planned to unleash levies on all remaining Chinese imports that had yet to be targeted on Sept. 1., but a phone call between the two sides reportedly encouraged the U.S. to ease its stance.
President Trump also appeared eager to avoid a holiday shopping hit, telling reporters that levies on some items were pushed back to December “so it won’t be relevant to the Christmas shopping season.”
His tone may have had something to do with the months of lobbying by companies, insisting that they would have little choice but to raise prices for consumers in the wake of higher tariffs.
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.
Other products subject to the delay that will also no doubt be on many holiday-shopping lists include cell phones, laptops, video game consoles, certain toys and computer monitors. The first two alone account for around $80 billion of trade.
There will also be certain products like car seats, shipping containers and Bibles that will removed altogether from the tariff list based on health, safety, national security and other factors.
Not everyone will benefit, though, as a swathe of apparel and footwear items will, as originally planned, be hit by 10 percent tariffs at the beginning of next month.
Still, stocks reacted positively, with the Dow Jones Industrial Average up 372.54 points, or 1.4 percent, to 26,279.91, while the S&P 500 was 1.5 percent higher.
In retail, American Eagle Outfitters closed up 5.5 percent to $16.38; Guess Inc., 3.9 percent to $15.44; PVH Corp., 3.6 percent to $74.67; Gap Inc., 2.8 percent to $17.95; Walmart Inc., 2.1 percent to $107.41; Nordstrom Inc., 1.8 percent to $29.12, and Capri Holdings, 1.9 percent to $30.35. Tech stocks were also on the upswing, with Apple Inc. leading the way at 4.2 percent higher to $208.97.
But while a plethora of stocks were in the black, the government’s move did little to calm trade organizations.
Rick Helfenbein, president and chief executive officer of the American Apparel & Footwear Association, cautioned: “While the Trump administration is delaying tariffs on ‘certain items of footwear and clothing’ for 105 days, and removing other items from the list entirely, it is still persisting with a destructive plan to impose tariffs on consumer goods used by every American and critical inputs used by U.S. manufacturers.”
David French, senior vice president government relations at the National Retail Federation, warned that uncertainty for U.S. businesses continues, and tariffs taking effect Sept. 1 will result in higher costs for American families and slow the U.S. economy.
“During this delay period, we urge the administration to develop an effective strategy to address China’s unfair trade practices by working with our allies instead of using unilateral tariffs that cost American jobs and hurt consumers,” he said.
For now, the fashion industry will be watching U.S.-China relations closely. It was reported that another phone call is set to take place in two weeks. The two sides were also meant to meet in Washington, D.C., next month, but it is unclear if that it still happening.
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