UK luxury apparel in the firing line as WTO authorizes new US tariffs on EU products
Following the World Trade Organization’s decision to authorize the United States to put tariffs on around $7.5 billion of goods imported from the EU, Washington has released its list of affected products.
Along with aircraft and a range of luxury food and drink products from several European countries, the list of goods subject to increased tariffs released by the U.S. Trade Representative on Wednesday evening singles out a series of apparel products to be hit with 25% duties when imported from the UK.
These products include wool and cashmere sweaters, men’s suits, women’s cotton nightwear and swimwear containing silk.
The proposed tariffs, set to come into effect on October 18, also target imports of single-malt Irish and Scotch whiskeys from the UK.
As reported by Reuters, the WTO’s decision is the latest development in a 15-year row concerning aviation subsidies.
In two cases dating to 2004, the Geneva-based organization determined that European company Airbus and its U.S. rival Boeing had received illegal subsidies worth billions of dollars from EU governments.
The U.S. was reportedly deemed to have suffered harm equivalent to approximately $7.5 billion, opening the door for the country to slap tariffs of the same value on products arriving from the EU. Washington had initially requested permission to impose tariffs amounting to around $11.2 billion.
When the WTO’s decision was first announced earlier on Wednesday, shares in many European luxury companies stumbled as fears were raised about possible tariffs on a wide variety of luxury goods, ranging from apparel and handbags to beverages such as champagne and whisky.
Paris-based LVMH – considered to be particularly susceptible to any new tariffs due to its operations in both the luxury fashion and beverage industries – saw its shares slip 3.3%, while shares in rival Kering fell 3.8%. Versace’s U.S.-based parent company, Capri Holdings, also suffered from a 4% drop in its shares.
According to CNBC, U.S. officials have argued that the EU has “no basis” for retaliation against the proposed tariffs. They have also requested a meeting with the WTO to approve the duties on October 14.
The new round of tariffs continues the more aggressive trade policy being pursued by the Trump administration abroad, which has led to increased tensions with a number of its trading partners, particularly China.
The U.S.’s ongoing trade war with the world’s second largest economy has already resulted in a range of duties being imposed on apparel, footwear and accessories imported from the Asian country, including tariffs of 25% on handbags, set to rise to 30% later this October.
Copyright © 2021 FashionNetwork.com All rights reserved.