A group representing 270 UK luxury brands caught in the middle of a trade spat between the United States and the European Union is preparing to launch a charm offensive in New York.
The trade mission led by industry body Walpole kicks off Monday. It was arranged before US tariffs on $7.5 billion worth of EU goods, including some luxury products, took effect on Friday. But the stakes are now much higher.
The tariffs, which result from a dispute over government subsidies to Airbus (EADSF), will make it more expensive for Americans to buy tailored suits made on London’s Savile Row, as well as whisky and cashmere sweaters from Scotland.
“We regret the choice of the US to move ahead with tariffs,” Cecilia Malmström, the EU’s top trade official, said Friday. She vowed that the EU would retaliate over US subsidies to Boeing (BA).
British luxury hit hard
EU products such as Parmesan cheese and French wine face new taxes. Luxury brands in the United Kingdom also had an “unfair focus” in the tariffs, Walpole CEO Helen Brocklebank told CNN Business.
The United States is the biggest market for UK luxury goods outside the European Union, accounting for 23% of exports, or about £9 billion ($11.6 billion) a year, according to Walpole.
“We will just redouble our efforts to show how incredibly beautiful, handcrafted and [of] extraordinary quality these British products are,” Brocklebank said ahead of her trip to New York.
Members had reported £1 million ($1.3 million) worth of new orders after the last trip, she said.
Kathryn Sargent, the first woman master tailor on Savile Row, said she would make clients aware of the tariffs and gauge their reaction during meetings in Chicago, New York and Washington D.C.
A 25% tariff could add about $1,625 to the cost of Sargent’s cheapest two-piece suits and “might make people think twice about a purchase,” she said.
Other high-end British brands that will be joining the trip include Harrods and Lock & Co., the world’s oldest hat shop.
UK at a disadvantage
As the only country facing tariffs on fashion and textile exports, Britain would be placed at a “massive disadvantage” to its European competitors, CEO of the UK Fashion and Textiles Association, Adam Mansell said in a statement.
The tariffs would affect £35 million ($45 million) of exports, spanning woolen jumpers, suits, pajamas, swimwear and linen, Mansell said.
The largest British maker of cashmere knitwear, Johnstons of Elgin, said the United States is a major export market for its knitwear. The company, which manufactures for brands including Burberry and Hermes, is participating in the trade mission.
“We will be urging our government to underwrite the cost of these tariffs that are the result of a dispute that has nothing to do with our industry,” Mansell said.
A spokesperson for the UK’s Department for International Trade said it was “listening carefully” to the concerns of UK business to understand how government could best support the industry.
Brocklebank said that the Walpole trade mission would highlight British luxury hospitality, including hotels such as The Savoy, Corinthia and Belmond, which French fashion group LVMH (LVMHF) bought last year.
“If we can’t export the goods we’ll just import the consumers,” she said.
Research by Walpole and Frontier Economics found that in 2017, the value of luxury sales to non-resident customers in the United Kingdom was £4.5 billion ($5.8 billion), with China, the United States and Gulf countries the top purchasing nations.