European fashion braces for Trump's tariff threat over Greenland

The European fashion industry faces fresh uncertainty as President Donald Trump announced weekend tariffs against eight countries. including major fashion exporters the UK, France, and Germany, as leverage to acquire Greenland from Denmark.

The tariffs, set to begin February 1st at 10 percent and rise to 25 percent by June, come as the sector awaits a critical Supreme Court ruling on January 20th that could invalidate the administration's authority to impose such measures without congressional approval.

The US Market Stakes

The timing couldn't be worse for an industry where the US represents roughly 30 percent of European luxury exports. With spring collections already in production and fall orders being placed, brands face immediate decisions about pricing, shipping schedules, and inventory allocation.

Several fashion companies have already filed lawsuits to recoup tariff payments if the Supreme Court rules against the White House. Many court observers expect such a ruling, given that a majority of justices appeared skeptical of the administration's position during November hearings. However, the anticipated December decision has been delayed, leaving brands in operational paralysis.

If existing tariffs are invalidated, companies could recoup millions. If upheld, Trump gains wider authority to weaponise trade policy, a prospect that worries industry leaders given his pattern of linking tariffs to unrelated geopolitical objectives.

Industry Impact

The proposed levies affect not just luxury houses but the entire European fashion supply chain. Italian ateliers, French textile mills, and British tailoring workshops all depend heavily on US orders. A 25 percent tariff could force brands to choose between slashing margins, raising prices in an already cautious consumer market, or shifting production outside Europe.

These aren't just numbers on a spreadsheet. We’re talking about artisan workshops, family businesses, apprenticeships. A 20 percent drop in US orders means real jobs lost. Some brands are already exploring contingency plans: expedited shipping to beat the February deadline, pop-up manufacturing in Mexico, or focusing on other markets. But for an industry built on seasonal planning and six-month lead times, reactive measures are costly and disruptive.

Europe's Response

The EU is already discussing its own countermeasures. According to Politico, EU officials are considering reactivating 93 billion in retaliatory tariffs suspended after last July's trade deal. The bloc is also weighing its Anti-Coercion Instrument, designed specifically to counter geopolitical trade blackmail. European Council President António Costa has called an emergency summit this week, signaling the severity of the situation. However, fashion executives worry that escalating trade tensions will trap the industry between competing political agendas.

Uncertain Future

What troubles the sector most isn't just this specific tariff threat, but the broader pattern it represents. When trade policy becomes a tool for any geopolitical objective, whether Taiwan, Greenland, or tomorrow's priority, the predictability essential for international business evaporates.

As one executive put it: "We've weathered plenty of challenges, but you can't build a business when the goalposts move weekly based on which territory a president wants to acquire."