What Donald Trump’s Presidency Means for the Fashion Industry in 2017

With less than three weeks remaining before President-elect Donald Trump takes his post as commander in chief of the United States, the predominantly anti-Trump fashion world is bracing for big changes.

The stormy election season saw fashion designers such as Ralph Lauren, Diane von Furstenberg, Marc Jacobs and Tory Burch throw their support behind Democratic candidate Hillary Clinton. Fashion, beauty and lifestyle magazines (among them Vogue and Cosmopolitan) as well as music and entertainment stars (such as Beyoncé, Rihanna and Lady Gaga) also publicly endorsed Clinton. Meanwhile, some industry executives who prioritized free and open global trade also seemed to favor Clinton’s trade policies over Trump’s, which called for a withdrawal from the controversial Trans-Pacific Partnership (TPP).

In late 2016, with an election win under his belt, Trump continued his anti-trade campaign rhetoric and confirmed that under his watch, the U.S. would have no part in the TPP. In a November video message outlining his intentions when he takes office, Trump said that on day one, he will issue a notification of intent to withdraw from the Trans-Pacific Partnership — calling the 12-country trade agreement “a potential disaster for our country.” (The countries that agreed to TPP in 2015 were the U.S., Canada, Malaysia, Australia, Japan, New Zealand, Mexico, Peru, Chile, Singapore, Brunei and Vietnam.)

Several footwear and apparel organizations — including the Footwear Distributors & Retailers of America (FDRA) and the American Apparel & Footwear Association (AAFA) — as well as footwear brands such as Nike Inc. have been vocal proponents of TPP, which promised to eliminate more than 18,000 taxes and other trade barriers, strengthen ties among member countries and increase economic growth.

Matt Priest, president of the Footwear Distributors and Retailers of America, lamented the consequences of Trump’s decision for the fashion industry in 2017 and beyond.

We had a once-in-a-generation opportunity within our grasp. We had a Republican Congress and a Democratic president who wanted to pursue this,” Priest said. “We had a half a billion dollars in savings during year one and $6 billion in duty savings over a decade — those are big numbers, and they mean a lot.”

Much to the chagrin of many in the footwear and apparel industries, President-elect Trump has also hinted that hefty tariffs could hit major importers, including fashion firms, in 2017.

In December, Trump doubled down on comments that he made via Twitter stating that he would impose a 35 percent tariff on the imports of firms that move their production outside of the U.S.

There’s a 35 percent tax, but there is no tax if you don’t move,” Trump said in a conversation with Fox News anchor Chris Wallace. “But if you move your plant or factory and you want to sell back into our country — [and you’ve fired] all your people — there are going to be consequences for that. There are going to be consequences.”

Stephen Lamar, EVP of the American Apparel & Footwear Association, said he believed that consumers would ultimately pay the consequences for Trump’s punitive tariffs and predicted far-reaching implications for innovation and growth at U.S. firms in 2017.

Our industry has been global for more than a generation now. We employ about a million in the United States, and those people are dependent on global supply chains — it’s what makes the footwear industry competitive,” Lamar said. “[A 35 percent tariff] would hurt U.S. companies and their workers to the extent that those tariffs get absorbed as extra costs in the supply chain, which deny the ability of companies perhaps to invest in [research and development] or to expand and hire more workers.”

In late December, reports emerged that Trump’s transition team also discussed a proposal to impose tariffs as high as 10 percent on imports.

According to CNN, a senior Trump transition official said on Dec. 22 that Trump’s team is considering the tariff as a means to spur U.S. manufacturing.

While the move could help the president-elect deliver on his “America First” campaign theme, Priest and other trade experts fear that Trump’s trade policies could set the U.S. up for a trade war.

The notion that the United States will produce every single product and commodity known to man so that we have access to it is a ridiculous notion,” Priest said. “We’re part of this global system, and there’s been this push by Mr. Trump and others to ignore facts … The rhetoric is not lining up with economic and global realities.”

 

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