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Shima Seiki YarnBank

14th August 2020, United Kingdom

UK knitwear exporters to US face continued punitive tariffs

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The US authorities have confirmed on Wednesday that 17 fashion and textile product lines will continue to be hit with an additional 25% tariff, the UK Fashion & Textile Association (UKFT) reports. The tariffs were first introduced in October 2019 as part of a long running dispute between the US and the EU over subsidies to the aircraft industry, the organisation said in a statement yesterday.

Adam Mansell, CEO of UKFT, said: “This is hugely disappointing news. The impact of the additional tariffs have been devastating for UK manufacturers selling to the USA. We are the only country to be hit with tariffs on fashion products and the current situation piles even more pressure on companies already reeling from the impact of Covid-19 and the hugely uncertain trading situation with the EU. Waiting for the outcome of a potential free trade agreement with the US isn’t enough. We need the government to take direct action now to support our manufacturing industry.”

Simon Cotton is CEO of Johnstons of Elgin, which makes cashmere and fine woollen cloth, knitwear and accessories in Scotland. He said: “We are exceptionally disappointed that these tariffs remain in place and continue to punish our industry for a dispute which is completely outside of our control.”

Bill Leach, Global Sales Director at knitwear brand and manufacturer John Smedley, said: “This is hugely disappointing. John Smedley has invested heavily into the US market for many years, resulting in strong sales and customer satisfaction across a wide array of America’s finest retailers. We also enjoy strong following on social media from across the US and we are immensely proud of the excellent working partnerships we have developed with customers, clients and media over decades.”

“Since October 2019, when the retaliatory additional 25% tariff was applied to all of our sales to the US, John Smedley has been forced to absorb this punitive cost in order to maintain the ongoing retail pricing of our collection and to maintain our existing proposition to our valued customers and clients in the US market. As a result, we have experienced significant margin and profit.

“The fact that British-manufactured knitwear has become embroiled in the longest running trade dispute in WTO history to this extent is deeply irritating, unfairly punitive and continues to have a deep and long-lasting impact on our business in the UK. Our connections to and with the airline industry are non-existent.”

“Should this retaliatory tariff application continue, John Smedley will need to take some tough decisions about our strategy for the US market.”

The 17 fashion lines affected are listed here. Note: The additional tariffs apply only to UK manufactured products.

UKFT has written to Liz Truss, Secretary of State for International Trade, requesting a meeting and demanding an immediate resolution to this dispute which it says has nothing to do with the UK fashion and textile industry.

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