America has chosen its President on Wednesday night and it has already caused a ripple effect in the trade and economic sectors worldwide. A Trump lead economic structure may cause a boom in trade. Here is what we think will happen to the billion dollar fashion industry when Donald Trump enters the White House.
1. Higher taxes on foreign goods would spell doom for the international fashion brands. European retail and luxury stocks like Prada and L’Oreal are down. Imposing tariff on goods from China and Mexico will definitely affect the trade consensus.
2. On the other hand lowering of taxes for the opulent class would mean more spending power. This will result in high-sales and increase the economic value of major high-end fashion brands.
3. Trump may call-off the Trans-Pacific Partnership deal which was meant to promote trade between 11 participating countries like Vietnam, Australia, Japan, and Malaysia. This deal would have reduced the production tariff’s on fashion goods imported and exported.
4. Forbes has predicted that the immediate effect after the election result will be that people will hold off on luxury purchases. It will also prove inflationary as brands will increase the cost for imports.
Newly elected President Donald Trump being a fan of Be American and Buy American will cause European luxury brands to suffer a big time within the country. It is only a matter of time to see what economic steps will be taken from inside the White House for the betterment of business. Till then it’s only wait and watch.
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