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US denim duty rise ‘will hit margins’

Designers, distributors and stockists of denim products from the US face a significant hit to margins after the European Union raised import duties.

From May 1, all denim products imported to the UK and Europe from the US have been subject to a 38% duty – up from 12% previously.

According to a notice sent out by HM Revenue & Customs (HMRC), denim products have been added to a list of goods that attract higher custom duties “in retaliation” to a 13-year-old piece of US legislation called the Byrd Amendment, which upped duties on certain imports to the country.

The HMRC note said: “Unfortunately, although the Byrd Amendment has been repealed [in 2006], the illegal subsidies to US business still continue.

“As such, the EU intends to increase the rate of retaliatory duty with effect from May 1, 2013.”

But one distributor said UK businesses and consumers would suffer. “Everybody will be affected,” she told Drapers.

“Manufacturers will take a hit because they have to give a bigger discount; it will eat into distributors’ margins so they will have to increase prices to retailers, and the customer will be affected because of the inflated prices.”

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