European Retaliation Tariffs Planned on U.S. Clothing
After President Trump signed an order on March 8 to impose tariffs on imported aluminum and steel, apparel makers were bracing for Europe to slap retaliatory tariffs on a variety of apparel coming from the United States.
The European Union issued a list of items that would be subjected to tariffs following the aluminum and steel tariffs, which go into effect in 15 days.
On that list were T-shirts, men’s and women’s blue jeans and shorts being shipped to Europe with an estimated value of $88 million.
Several apparel trade organizations were livid about the steel and aluminum tariffs, which Trump has been threatening for some time and that followed recently imposed tariffs on solar panels and washing machines.
“We know these tariffs will be catastrophic for the U.S. economy and jobs,” wrote the U.S. Fashion Industry Association in Washington, D.C. “While our members don’t import a lot of steel or aluminum, these tariffs could result in disastrous consequences for them. Already, the European Union is calling out a variety of industries, including iconic American denim and T-shirts, as potential targets for tariff increases of their own.”
The trade association noted that imports support high-quality jobs for Americans, help U.S. businesses to grow and encourage American companies to do good in other parts of the world.
Steve Lamar, executive vice president of the American Apparel & Footwear Association, noted that putting tariffs on imported items ultimately puts a tax on consumers. “There is a direct cost that rolls into our industry. It is not like the can industry or the auto industry, but it is there,” he said, noting that manufacturers, retailers and importers buy trucks to haul merchandise and manufacturers package their goods in aluminum cans.
“We have a member who is a lab company that uses steel and aluminum in its services,” Lamar said.
The European Union’s tariff on T-shirts, denim and shorts is reminiscent of five years ago when the EU increased a tariff on women’s blue jeans made in the United States. That tariff went from 12 percent to 38 percent.
The tariff had some U.S. apparel companies considering whether they should leave their Los Angeles factories and move production to Mexico, which has a free-trade agreement with the EU.
Another concern is that Trump is also considering imposing a tariff on any intellectual property coming from China. This would affect apparel, footwear and consumer electronics, among other things. “This would be directly detrimental to us,” Lamar said. “People are saying this could happen in weeks, not months. We are worried about it.”