What a Trump Presidency means for the fashion industry

Los Angeles - In a surprising turn of events, Donald Trump has become the next President of the United States. Against odds favoring his opponent Hillary Clinton, Trump gained the electoral vote which propelled him into presidential role on Tuesday, November 8. In an economic sense, U.S. and international businesses in luxury markets and the fashion industry should be wary.

While the media predicted a win from Clinton, Trump’s majority electoral vote came as a shock to many U.S. businesses. As companies braced for new trade policies, it seems that the new election will consequently have an effect on U.S. business in other countries. His stance calls into question the luxury market since during his presidency he is likely to modify existing international production and trade policies.

Forbes predicts that the retail industry will largely suffer due to Trump’s presidency. The publication claims that both small and large purchases will stall as the market is in a state of “paralysis.” Immediately following the election, U.S. citizens will most likely not make as many purchases for “hold back for fear of how to handle the election on a personal basis.” Also, the publication predicts that the election will have an inflationary effect that will ultimately lead to higher costs. This will cause retailers to raise their prices, especially for imports.

It also seems likely that European brands will not fare well in the U.S. "Since [Mr. Trump] seems to be a fan of everything for and in America, the European luxury brands might face a challenge of increased tariffs on foreign goods, which will indirectly result in a big drop in American revenues for these brands," Ambika Zutshi, CEO of Fashionbi , Milan told Luxury Daily.

Donald Trump's presidency could have major effects on American revenues in Europe

Immediately following the results of last night, European retail and luxury stocks are already down, according to WWD. The stocks that were most likely to be affected included any that are “highly exposed to USD, namely Luxottica, Brunello Cucinelli, Ferragamo, and Burberry,” managing director at Exane BNP Paribas Luca Solca told the publication. Additionally, Asian markets also started to decline during the election results.

Because his trade policy is so drastic from what is already in place for the country, the result could ultimately leave devastating effects for the fashion industry. WWD reported that it’s possible Trump could actually get rid of the Trans-Pacific Partnership deal, which helps to promote trade between 11 other countries. As a policy that has been in place for ten years that luxury markets and fashion business alike have used, it’ll be interesting to see what will come as a result if Trump is able to eradicate the U.S. of this agreement.

At this moment, it’s unknown exactly whether or not the economic state of the country will get better. During his campaign, Trump promised building America through his economic strategies, yet only time will tell whether or not he can deliver on his word. Weighing in on the current economic state of the U.S., Paul Krugman of the New York Times states, “If the question is when markets will recover, a first-pass answer is never.”

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