The US announced the trade agreement with the UK yesterday (8 May).

Broadly, the agreement will not eliminate the 10% “reciprocal” tariff the US is imposing on imports from the UK, though British officials indicated that “work will continue” on that issue.

In addition, the UK said the US has agreed to give it “preferential treatment in any further tariffs imposed as part of Section 232 investigations.”

The US has, however, pledged to negotiate “alternative arrangements” to its Section 232 tariffs on UK autos, steel, and aluminium.

The US says the deal will allow it “unprecedented access to the UK market” including in the textiles category, with tariffs falling from 5.1% to 1.8%.

The agreement also ensures streamlined customs procedures for US exports and closes loopholes and increases US firms’ competitiveness in the UK’s procurement market.

Commenting on the deal , Dr Sheng Lu, professor of apparel studies at the University of Delaware told Just Style exclusively: “Although the immediate effects of the UK-US trade deal on the textile and apparel industry may be limited, the announcement of the deal and its revealed content thus far shed light on the kind of “trade deal” the Trump administration is seeking. On the positive side, the deal will hopefully reduce the trade tensions between the two countries and create a more stable business environment for bilateral trade.

“However, it could be disappointing, although not necessarily surprising, to fashion brands and retailers that the 10% universal tariffs imposed by the Trump Administration are here to stay. This sends a strong signal that future US trade deals with other countries, including many critical apparel-supplying countries in Asia, likely won’t remove the tariffs either. As high tariffs become the “new normal,” their long-term impact on both the US and global economies needs to be watched closely. When the macroeconomy slows or enters a recession, the fashion industry will suffer regardless of Trump’s trade deals.”

Bob Antoshak, VP of strategic global sourcing and development at Grey Matters Concepts added: “Although details remain sketchy, the fact that the US and UK announced a trade agreement in the same week as the UK and India announced a free trade agreement leaves me wondering if the US and India will soon announce an agreement. From a negotiating standpoint, the US-UK FTA does provide some leverage for both countries in negotiations with the EU, while the UK-India FTA, when coupled with a US-India FTA, would provide leverage with China.

“Sure, this may be crazy speculation on my part, but the world, for better or worse, appears to be forming new trading blocs and alliances. Now, if we could only see the details to determine how all of this affects the apparel industry!”

By Just Style