There was some positive news for fashion brands and retailers sourcing from China over the weekend as the US agreed to lower tariffs on Chinese goods from 145% to 30% for 90 days.

But, the news was not so rosy for anyone sourcing from countries other than China.

A Whitehouse article published on 8 May titled ‘Great deal for America: President Trump’s “breakthrough” trade deal’ pretty much summed up who won in the first of Trump’s many negotiations with global trading partners.

The article, which was based on the UK-US trade deal reads: “It’s the first such deal under President Trump’s transformational plan to liberate Americans from globalist trade policies that make foreign countries rich while Americans get robbed.”

There is also an infographic in circulation that shows the UK now has at least 10% tariffs across the board from the US, including on fashion and textiles, while the UK has only imposed 1.8% tariffs on American goods.

The UK is not a major fashion sourcing country of course, but it has always celebrated a so-called ‘special relationship’ with the US. So, the fact Trump will not remove his new 10% base rate tariffs for his country’s special friend, does not bode well for the discussions still to come with both big and small fashion sourcing nations.

Indonesia Textile Association’s vice chairman Anne Patricia Sutanto told Just Style only last week that US brands and retailers were under the impression Trump’s current 10% tariffs were just a temporary fixture.

Similarly, she hoped negotiations could be made ahead of the much higher 32% reciprocal tariffs due to start once the 90-day pause ends.

She admitted that some US fashion brands and retailers had asked the wider fashion supply chain to help with a small part of the 10% tariff if possible during this current uncertain period.

It is noble for those in the fashion supply chain to ‘help’ fashion brands and retailers with the current 10% tariff burden in the short term.

But, what happens in the long-term if Trump does keep a 10% base-rate across the board? Who picks up the burden then?

The margins in the fashion and textile sector are already small so surely it’s not fair to expect garment factories to reduce their margins even further?

And let’s be frank: Given the UK was a special case there is still a risk that some of these much higher reciprocal tariffs, especially on Asian fashion sourcing majors, could still be on the cards.

Sadly, this first trade deal has created more questions than answers, but it does show the importance of fashion brands and manufacturers having regular honest discussions about what a true partnership really looks like during periods of uncertainty.

Arguably, it’s also a time when fashion brands and retailers should remove some elements of competitiveness and work together to explain to consumers as a group that they will all need to pay at least some of the duties being added to their fashion goods for the foreseeable future.

By Just Style