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US imposes retaliatory tariffs on UK and EU products, including luxury brands

By Don-Alvin Adegeest

14 Aug 2020

Fashion companies may have little to do with Airbus and aviation, but tariffs imposed by the US Trade Representative (USTR) effective September 1st will see retaliatory tariffs of 25 percent on goods including tailoring, wool, cashmere and linen homeware.

Walpole, the trade body representing British luxury companies, said Washington had previously raised the import tariff on certain high-end goods from Europe to 25 percent, hitting UK and EU luxury businesses hard in retaliation for subsidies paid to manufacture the Airbus fleet of planes.

In order for British and European luxury brands to cease being caught in the crossfire of the Airbus-Boeing dispute, Walpole had presented evidence to the USTR explaining the harm that the 25 percent tariffs have on the luxury goods sector, the additional harm that this inflicts on UK luxury businesses as they deal with Brexit and the impact of Covid-19 and the negative impact on American consumers’ choice and co-investment opportunities between the US and UK.

Tariffs disproportionately affect UK producers

When faced with options for cheaper goods, the disproportionate effects that the US EU tariffs have on UK producers and the creation of an imbalance between different markets could see U.S. retailers turn to Italian and Chinese cashmere producers to avoid the tariffs on Scottish cashmere

Consequences for UK luxury companies

The impact on brands and companies will have many negative consequences, including scaling down operations and export volumes in the US and potentially cut jobs.

As part of the review, the US was considering whether to increase and broaden punitive tariffs on British and European luxury goods, which have been caught up in the long-running dispute.

History of Airbus dispute

In October 2019, the WTO authorized the United States to take 7.5 billion dollars in countermeasures following a WTO victory in the long-running dispute against the EU, France, Germany, Spain, and the United Kingdom regarding their subsidies for the Airbus consortium.

The Department of International Trade (DIT) has advised Walpole that Liz Truss, the Secretary of State for International Trade, continues to push for the removal of all tariffs and to reach a resolution to this situation with expediency.

Article source Walpole; Image via Pexels