The election of Donald Trump raises new challenges and opportunities for UK businesses, particularly in the fashion sector.
- Following the election, the US dollar has strengthened against the pound and euro, indicating immediate economic impacts.
- Concerns grow over potential high tariffs on UK exports to the US, threatening British businesses, especially luxury brands.
- Trade relations with the Labour Party and potential US-China trade tensions add further uncertainty to the market.
- Industry leaders advise caution in pricing strategies due to possible unexpected changes in US import duty rates.
The unforeseen shift in leadership in the United States, marked by Donald Trump securing the presidency, has injected a measure of unpredictability into the UK fashion industry’s commercial prospects. The initial economic repercussion was a strengthening of the US dollar, which rose by 1.4% against the pound and 1.8% against the euro following the election results. This currency movement reflects immediate market responses and sets the stage for potential shifts in trade dynamics.
Despite the currency fluctuations, a British footwear executive expressed minimal concern regarding expansion plans in the US, attributing confidence to past positive economic performance and robust stock market reactions. However, there remains significant apprehension around the possibility of high tariffs, which could impede imports from China and other sources. “The only other downside will be Trump’s relations with the Labour party, which could affect US trading with the UK. But I doubt he will go as far [as that],” the executive remarked.
CEO Helen Brocklebank of the luxury industry body, Walpole, highlighted North America’s significant role as a consumer of British luxury, constituting 24% of exports worth approximately £13 billion. The spectre of Trump’s proposed 10% to 20% tariffs on imported goods threatens the success of these brands and the multitude of jobs they support. The tariff prospect raises the price for American consumers, potentially dampening demand for UK luxury goods. The scenario is further complicated by the likelihood of the EU imposing counter tariffs on US imports, should the Trump administration’s trade policies come into full effect.
The historical context provided by the Boeing/Airbus dispute serves as a cautionary tale; tariffs imposed during this period significantly affected sectors including cashmere, wool, and tailoring. A British clothing brand director expressed the difficulty in passing increased costs to consumers, emphasising the need to absorb expenses and the risks posed by an imminent US-China trade conflict. “I think we might see an uptick in orders as our wholesale partners rush to replenish their stock before [Trump’s] presidency starts,” he noted, indicating proactive measures being taken within the industry.
Paul Alger, International Business Director at UK Fashion and Textile Association, called for vigilance, particularly concerning the US’s ongoing review of its De Minimis rule, which currently allows duty-free imports up to $800 per day. He cautioned against committing to US dollar pricing for 2025, given the potential for sudden duty rate alterations. The UK’s strategic navigation of these emerging challenges will be critical in maintaining stable trade relations and economic resilience.
The future of UK fashion amid Trump’s presidency holds inherent risks; however, industry leaders are actively seeking strategies to mitigate potential impacts.
