Talking strategy: Trump tariffs create uncertainty for world textile and apparel trade
World textile and apparel trade grew in 2017 for the first time since 2015—and this has been seen as a welcome development as the world economy has continued to emerge from the global financial crisis of 2008. Key to this recovery has been trade liberalisation facilitated by members of the World Trade Organization (WTO). However, there are fears that the protectionist trade policies favoured by the USA's President Trump may lead to a slowdown in world trade, or even reverse trade growth. Since becoming president, Mr Trump has withdrawn the USA from the Trans-Pacific Partnership (TPP) and sought to renegotiate the North American Free Trade Agreement (Nafta). Most recently, he announced the imposition of additional tariffs of 10% on US imports of products in 5,745 tariff lines from China with effect from September 24, 2018, and an increase in this percentage to 25% as of January 1, 2019. Such a bold move has provoked a mixed response. Retailers in the USA are concerned that the implementation of the tariffs will create "chaos" for the fashion industry's supply chains, and the United States Fashion Industry Association (USFIA) argues that the tariffs will have a negative impact on consumers. China has retaliated by placing tariffs on US$60 bn worth of imports from the USA, which are also set to take effect from September 24, 2018. In this edition of "Talking strategy", Robin Anson discusses the potential outcomes of the implementation of President Trump's tariffs, and draws on the responses to the additional US tariffs from a number of key organisations—including the American Apparel & Footwear Association (AAFA), the National Council of Textile Organizations (NCTO), the National Retail Federation (NRF) and the USFIA.
Learn how to effectively navigate the market research process to help guide your organization on the journey to success.Download eBook