Walpole Comment | The impact of US tariffs on UK luxury
You no doubt share Walpole’s deep frustration at the news that the Trump administration will impose tariffs on $7.5 billion in European imports in a case involving European Union subsidies to Airbus.
Whist the dispute is about aircraft subsidies, Britain luxury brands will be disproportionately impacted by the proposed tariffs due to the application of 25% duties to goods including whisky, liqueur and wine; cashmere; bed linen and men and women’s clothing. It is of particular concern that these tariffs come at a time when there is already so much political and economic uncertainty.
The US is one of the largest luxury markets in the world and British luxury’s biggest export market outside the EU, with 23% of British luxury goods leaving our shore destined for North America. It also represents a huge growth opportunity for many British luxury brands, particularly SMEs, with three quarters of Walpole members naming the US as their priority export market. To penalise businesses that are in significant expansion phases, looking for new routes into the US and creating products American consumers desire – Johnston’s of Elgin cashmere, Peter Reed bed linen, Saville Row suits, English wine and numerous Scotch whiskies – will likely impact consumer choice as well as business growth.
The British luxury sector has achieved 49% growth in the four years from 2013-17, it now employs almost 160,000 highly skilled people in all regions of the UK and is growing 9.6% per year on average, However, if it is to continue on this trajectory, particularly in light of Walpole’s warning of the £6.8 billion potential loss in export revenues in the event of no-deal Brexit, there must be a response from government which ensures that a pro-business Brexit is still possible and that the UK, European and US authorities will act quickly to de-escalate this trade war which will harm both consumers and manufacturers.
Through our relationships with UK government and our on-going membership of the ECCIA in Europe, Walpole will continue to advocate strongly on behalf of all our members and pursue policies that create an environment which protects British luxury domestically and overseas.
In light of today’s news, Walpole will embark on its third annual Trade Delegation & British Luxury Showcase in New York in October with renewed zeal. We have always felt there is much to be achieved by strengthening trade and investment ties between the UK and US and promoting political, business and media relationships – and that has not changed, if anything we will bang the drum for British luxury even louder.