What do the European import tariffs mean on US products for the fashion industry?

The trade relationships between the European Union and the United States have become more complex since President Donald Trump has again introduced import taxes. As a countermeasure, the European Union introduced its own import tax on March 12 to protect European companies, employees: interior and consumers: inside the consequences of unjustified trade restrictions.

These so -called “compensatory measures” come into force on April 1. This means that tariffs are charged on products such as textiles and leather goods. The European import taxes should affect a total of around 18 billion euros. The “compensation measures” are intended to ensure that the total value of the EU measures corresponds to the value of the trade affected by the new US tariffs. What do the European import tariffs mean on US products for the fashion industry?

What you should know about the EU compensation measures on the US import taxes:

The import taxes announced on March 12 are actually “compensatory measures”, which were already introduced in 2018 in response to the Trump government. If you take a closer look at the fashion industry and take a look at the list of product categories, it can be seen that many textile -containing products will fall under the import tax of 25 percent. For example, carpets and suitcases provided with textiles, but also clothing, shoes and headgear for women, men and children contain the textiles of US companies that fall under the new tariffs. The same applies to products that contain leather.

Various media reported on the day of the announcement of the new import taxes on more expensive jeans. Fashion entrepreneur Daan Broekman called this on LinkedIn “Fake News”. Why? The definition of “Waren with origin in the USA” means that the goods were manufactured in the United States, as explained later in this article. However, many US fashion companies such as Levi’s, Wrangler and Lee have their articles produce in various factories worldwide. US companies can therefore change the origin of their products and thus avoid increased tariffs. If you handle the rules, the prices of these articles will increase less.

However, it is still questionable how the definition is used “with origin in the USA”. Fashionunited asked at the European Union press office about the exact details, but this stated that they still had to check this. In any case, the established principles of customs law determine that a product comes from a certain area if it was fully manufactured or “significantly changed”, as Judith Bussé and Lorenzo di Masi, already wrote: Interior of the International Chancellery Crowell & Moring, already in 2018 for fashionunited. This refers to a process that gives a product a specific property that it did not have before. This is not about labeling, packing or attaching a logo. “With regard to jeans, other clothing and cosmetic products that generally have a rather complex production cycle, the importance of ‘significant change’ can be discussed. By taking the last product transformation outside the United States, manufacturers can mitigate the negative effects of the measures. ”

The European import taxes on US products can have an impact on the fashion industry. However, the past shows that many US companies find ways to bypass them. Since the production processes of many large US fashion companies are located worldwide, you can limit the additional costs, which also means that the price increases for European consumers: remain minimal inside. However, it remains to be seen how the definition is interpreted “with origin in the USA”. This will be crucial for the final effects of the measures.