US fashion executives concerned about trade protectionism

American fashion industry executives are concerned about the impact of
trade protectionism according to the latest study by the US Fashion
Industry Association (USFIA).

This week the USFIA released its fifth annual Fashion Industry Benchmarking
Study, with findings showing overall optimism but with widespread concern
about trade barriers, increased tariffs and the effect on fashion
businesses.

The study surveyed executives from nearly leading fashion brands retailers importers and wholesalers including some of America’s
largest retailers.
Conducted in conjunction with Dr. Sheng Lu, associate professor at the University of Delaware Department of Apparel Studies,
the survey asked respondents about business outlook sourcing practices utilization free trade agreements preference programs views on policy.

Trade policies are top concern for fashion industry

For the second year in a row trade policy agenda United States is ranked top challenge U.S. fashion industry, more than percent
of respondents rank this issue among their five business challenges with one-third ranking it either or far exceeding concerns about
other issues on list. from consistently protectionism between and

Companies’ growing concerns about the direction of U.S. trade policy under the Trump administration are understandable states report.
Since January, the President has issued at least six presidential proclamations imposing punitive tariffs on steel and
aluminum exports from several important allies. In response the European Union, Canada, and Mexico have retaliated against some products
including apparel home textiles.

Similarly based on the results of investigation china ip practices under section trade act trump administration has
announced it will levy additional tariffs percent to hundreds billions U.S. imports from China.

Trade war?

While it is too early to know whether this will be a “trade war” or a
temporary hiccough, U.S. fashion brands and retailers are justifiably
concerned.

Increased sourcing costs

Another time of concern is the pressure of “increasing production or
sourcing cost” for brands and retailers. 54 percent of executives rank cost
among their top five business challenges in 2018, a notable increase from
34 percent in 2017. There are two possible explanations: cost could be
rising in absolute terms, and the intensified trade tensions caused by the
protectionist trade policy agenda may force companies to switch to more
expensive sourcing destinations, writes Dr. Lu.

Despite concerns about trade policy and cost executives are more confident the five-year outlook for U.S.
fashion industry in than they were a year ago although confidence has not fully recovered to level seen.

In addition percent of respondents say they plan to hire more employees the next five years compared with
previous studies market analysts data scientists sustainability related specialists or managers and supply chain are
expected be most in-demand.

Sustainability is a priority

85 percent of respondents plan to allocate more resources for
sustainability and social compliance in the next two years, in areas
including providing training to suppliers and internal employees, adding
more employees, and working more closely with third-party certification
programs on sustainability and social compliance. However, the availability
of operational budget remains the primary hurdle for companies that want to
do more.

The survey was conducted between April 2018 and May 2018. In terms of
business size, 76 percent of respondents have more than 1,000 employees,
including 64 percent with more than 3,000 employees; this suggests the
findings well reflect the views of the most influential players in the U.S.
fashion industry.

Photo credit: Sadlers UK; Article source: USFIA 2018 Fashion Industry
Benchmarking Study By Dr. Sheng Lu