European Brands Await Word on Tariffs

The Trump administration is due to review tariffs imposed on European luxury goods in the Airbus-Boeing trade spat.

By Evan Clark on August 12, 2020

British and European luxury brands — hoping to duck out of the crossfire of the Airbus-Boeing trade fight — were waiting for the next shoe to drop Wednesday as the Trump administration was due to possibly adjust the 25 percent tariffs set on many luxury goods imported to the U.S.

Washington raised the import tariff on certain high-end goods from Europe to 25 percent, hitting cashmere knitwear, merino wool and Savile Row suits hard and in retaliation for subsidies paid to manufacture the Airbus fleet of planes. 

The move was sanctioned by the World Trade Organization and the U.S. has the right to review and tweak the tariffs, which could go as high as 100 percent, every 180 days.

That set Wednesday as decision day for any new tariffs that could go into force next month. Airbus recently promised to stop accepting the subsidies, but the tit-for-tat tariffs could continue.

The EU, which has accused the U.S. of aiding Airbus competitor Boeing, might also retaliate with tariffs of its own on U.S. made goods. 

Beth Hughes, vice president of trade and customs policy at the American Apparel & Footwear Association, in official comments on the matter to the U.S. government, said: “The apparel and footwear industry has become collateral damage in trade disputes negatively affecting the entire supply chain.…This dispute has already caused a negative impact on the industry. For example, our members employ American workers who use textiles from Europe to make clothes in the United States. Other American workers design, develop, market, and sell the clothes and handbags their companies import from Europe. This retaliation only hurts those American workers by raising costs, costs which are passed on to U.S. consumers in the form of higher prices, which, in turn, lowers sales.”

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