The election of Donald Trump as US President has sparked discussions across the Atlantic about potential changes in trade policies.
- The immediate aftermath saw a rise in the US dollar, affecting the exchange rate with the pound and the euro.
- Concerns are rising among UK fashion retailers about potential tariffs on imports if Trump enforces high tariff policies.
- The British luxury sector, which heavily relies on exports to the US, could face significant threats under a Trump presidency.
- There is uncertainty within the industry as UK businesses brace for potential trade friction involving the US, EU, and China.
Donald Trump’s return to the presidency has led to fluctuating currency markets, with the US dollar rising against both the pound and the euro. This change has immediate implications for international trade and currency exchange rates. An executive from a British footwear company expressed that while past economic trends under Trump were positive, the looming threat of high tariffs could pose significant challenges. “A lot depends on whether Trump will pursue the high tariffs – that will be an obstacle to bringing in goods to the US from China, but we have other [manufacturing] sources we could use,” he noted.
The luxury sector faces a precarious situation, as North America constitutes a major export destination for British luxury brands. Helen Brocklebank, CEO of Walpole, highlighted the substantial impact potential tariffs could have on British luxury exports, which represent 24% of all exports totaling approximately £13 billion. She warned that such tariffs would not only harm the luxury sector but also American consumers who may face increased prices.
Brocklebank also raised concerns about the UK government’s need to navigate Trump’s trade expectations. She referred to past trade tensions, such as the Airbus-Boeing dispute, where retaliatory tariffs severely impacted British industries. This history underscores the potential challenges in navigating trade relations under Trump’s leadership.
The apprehensions are further echoed by a director from a British premium clothing brand, who mentioned that absorbing tariff costs might be inevitable as passing them to consumers could hinder sales. Past experiences during the Airbus-Boeing dispute have left deep impacts, forcing brands to bear the financial brunt.
Paul Alger from the UK Fashion and Textile Association stressed the need for cautious planning among companies setting US dollar prices for 2025. With uncertainty around potential duty rate changes, businesses need to stay vigilant and adaptable in their pricing strategies. There is also an ongoing review of the US De Minimis rule, which could impact import duties and sales tax-free limits, further adding to the uncertainty.
UK fashion retailers must prepare for possible trade challenges as Trump’s presidency introduces potential tariffs.
