First US presidential debate raises uncertainty in apparel sector

Putting aside the general vilification and bickering, the key question remains: what impact will the policies on the table have on the global fashion supply chain in five months’ time?

US presidential debate reveals concerns about US-China relations

University of Delaware apparel studies professor Dr. Sheng Lu believes both Biden and Trump view China as a strategic competitor and a threat to US national security.

It emphasizes that regardless of which US president is elected, US-China bilateral relations could become even more tense and confrontational in the coming years.

As a result, he states, “US fashion companies may find it necessary to further reduce their exposure to China and actively pursue alternative sourcing and supply chain options.”

What will be the status quo regarding tariffs?

American Apparel and Footwear Association (AAFA) President Steve Lamar told Just Style in an exclusive interview that “unfortunately” both candidates have accepted the status quo on tariffs, which he describes as a “very regressive and misogynistic tool.”

Lamar shared the view that the debate has doubled down on a “boring approach to trade policy,” before adding, “The costs of shoes, clothes, backpacks, and other basic necessities should not rise disproportionately for women and low-income Americans, as is the case under the current tariff approach.”

He also notes that the U.S. hasn’t seen such a large increase in clothing and footwear prices in decades.

AAFA says Americans need to see a more positive and predictable approach that encourages smart trade, supports investment and fosters competition.

Lu is particularly concerned about Trump’s threat to impose global tariffs on imports from all sources, which he says could potentially exacerbate the inflation problem and trigger new market panic.

Meanwhile, Antoshak says the lack of solid knowledge on trade policies that would impact the apparel industry, such as Trump’s proposed tariff hikes, leaves the sector with “significant uncertainty.”

Fighting climate change and prioritizing sustainable development

Climate change and the pursuit of sustainable development are topics of great concern to the global clothing industry.

Lu notes that American apparel companies want more direct policy support for the production, trade and consumption of sustainable apparel products.

He says Biden’s trade policy places a strong emphasis on fighting climate change and promoting sustainable development.

On the other hand, he continues: “Trump is not known as a strong advocate of combating climate change, but rather favors reducing regulation in order to create a more business-friendly environment.”

Lu believes this could provide fashion companies with greater operational efficiencies in implementing their own sustainability efforts.

Ongoing Global Socio-Economic Challenges

Regardless of who becomes the next president, Lu wants to remind the global apparel sector that American fashion companies will continue to face significant uncertainty amid the struggling U.S. economy, trade war and geopolitical tensions.

He also acknowledges that while the Biden administration has struggled to bring down high inflation that has kept consumers from spending money on clothing, Trump has also failed to offer a credible and timely solution to the problem.

What will be the overall impact of electing the next US president?

Neil Saunders, retail analyst at GlobalData, is an early adopter of the risk, suggesting that “the debate increases the probability, though not the certainty, that Trump will win in November.”

In an interview with Just Style, he says that this means both good and bad news for the clothing industry.

The good news, he said, is that Trump is likely to be more generous in cutting taxes and keeping them low, which would boost discretionary spending in the medium term.

The bad news, however, is that “Trump could be more aggressive on tariffs, which could cause prices on some clothing items to rise.”

Earlier this year, Just Style analyzed the pros and cons of a Biden or Trump presidency for the apparel sector following the November U.S. election.

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