Fashion industries may have nothing to do with Airbus and aviation, but tariffs imposed on products like tailoring, wool, cashmere and linen homeware by the US Trade Representative ( USTR) effective September 1st will see retaliatory tariffs of 25 per cent. Walpole, the trade association representing British luxury enterprises, reported that the Washington import tax on certain high-end goods from Europa had previously risen to 25%, hitting luxury enterprises in the UK and in EU harshly in return for subsidies charged for the Airbus fleet.
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.