Business

Fast fashion: the first victim of US-China tariffs war

by Angela Gonzalez-Rodriguez
Jan. 29, 2019

New York - The underground war that the governments of China and the United States have been maintaining for months threatens to claim the first victim in the textile sector: the so-called 'fast fashion’, which has a large supply dependency of the Chinese giant, could be the first one to 'fall'.

Increasing commercial frictions between the United States and China will impact the fashion retail market in 2019, according to the forecast recently released by 'California Apparel News'.

China-US tariffs war directly impacts discretionary consumption, affecting fast fashion

In a report published in mid-January, the US magazine cites industry experts saying that the reduction in consumption, caused by the cooling of the economy in 2018, could be extended by commercial disputes held by two of the greatest economic powers in the world since last summer.

"If the trade war continues, we will see some inflation in the prices of moderate-priced and low-end products," said Paula Rosenblum, a partner at Retail Systems Research (RSR). "Since clothing is largely a discretionary expense, the impact will be rapid."

Online refunds and purchases made via mobile devices are also taking their toll on the industry, according to the report.

Although not quantifying the impact, Rosenblum acknowledged in a statement published by the Chinese news company Xinhua that she doesn’t "remember the last time that American retailers faced the consequences of a commercial war."

In a similar vein, the RSR, an industry-leading, Florida-based retail think tank, said in a recently published study on retail market predictions for 2019 that "Carelessly implemented tariffs will kill the goose that lays the golden eggs of retailers."

Image: Textile Factory in China. Credits: pxhere