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Editor’s Comment: Double tariff trouble for British fashion

British fashion retail has been dealt a double dose of bad news in recent days.

Last week, the industry was caught up in a spat between the US and the European Union over aircraft subsidies, which will lead to a 25% levy on the export of made-in-UK suits, knitwear and coats to the US from 18 October.

And, as negotiations with the EU soured further, this week the government revealed that 140 clothing items brought in from developed countries will be subject to import taxes of 8% to 12% if a Brexit deal cannot be agreed, up from the previously announced 97.

Among the products added to this 12-month tariff regime are women’s cotton or wool blouses, trousers and jackets, and men’s swimwear. This is in addition to the levy of up to 12% on certain clothing exports to the EU in the event of a no-deal Brexit, announced in March.

Substantial new tariffs could be the final nail in the coffin for some UK companies. Some of those affected by the US levy have told Drapers they simply will not be able to absorb it, and have warned that job losses may occur as a result.

Many of these companies have fought hard to continue manufacturing in the UK, and we have seen a welcome resurgence in the sector in the run-up to Brexit. But future investment could be quashed by the threat of punitive taxes.

Meanwhile, high street suppliers are telling us the new EU import tariffs will be passed on to Brexit-rattled consumers, whose caution in September led to the lowest monthly retail growth since records began. This will only serve to heap further pressure on British retailers.

At the time of going to press, ministers had reassured the House of Commons that discussions with officials from the US were taking place to try to reach an agreement that avoids new tariffs. At the same time, prime minister Boris Johnson’s “final” Brexit offer has won cautious support from MPs in Westminster, but looks unlikely to convince the EU 27.

With only three weeks to go until the UK leaves the EU – deal or no deal – the government must act now to help British retailers and manufacturers ride out the Brexit storm, and have robust trading relationships in place with countries outside of the bloc. 

Readers' comments (1)

  • does anybody know, from an e-commerce standpoint - will this effect goods going under the de minimis value of $800?

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