If the ultimate goal of the Trump administration’s trade war was to attract investment to the United States, it doesn’t seem to be working. “It wouldn’t make sense to manufacture Gucci bags in Texas”, said François-Henri Pinault, CEO of the Kering group, speaking to French lawmakers in response to Emmanuel Macron’s call for “economic patriotism”. His stance stands in stark contrast to that of rival Bernard Arnault (LVMH), who remains the only major player openly stating an intention to expand production in the US – where his group has already operated for decades.
Meanwhile, the scenario has shifted yet again. On Monday 12 May, Donald Trump announced a reduction in tariffs on Chinese products from 145% to 30%, while China has lowered its own tariffs on US goods from 125% to 10%. The White House also confirmed a cut in tariffs on de minimis shipments from China (parcels under USD 800 in value), reducing them from 120% to 54%. These changes came into effect on Wednesday 14 May.
Pinault says no
“For us, it makes sense to highlight the level of craftsmanship – whether French or Italian – behind Saint Laurent or Gucci products,” Pinault told Le Figaro. “Our international objective is to open new retail stores. Given the current economic context, we’re more likely to streamline our distribution networks than expand them. But we have no issues with investment, either in the United States or in China”.
The investor dilemma
In contrast, US brands are flooding Chinese suppliers with urgent calls to “produce and ship quickly”. Their aim is to get goods through customs before 14 August, which marks the end of a 90-day trade truce between the US and China. The South China Morning Post shared the experience of Wang Jie, a footwear manufacturer in Guangdong, who had to shut down a production line in April after US clients cancelled orders following the initial tariff announcements. Now, those same clients are urging her to resume production and dispatch shipments as soon as possible — a clear sign of the volatility plaguing global supply chains.
US retailers breathe a sigh of relief
The temporary reduction in tariffs between the US and China has provided a much-needed boost for the fashion industry. American trade bodies representing footwear and retail (FDRA, AAFA, NRF and RILA) are now calling for more lasting trade agreements to further ease the tax burden on imports, reports Footwear News. All eyes are on 14 August, when the 90-day negotiation window closes and fashion and footwear businesses must finalise plans for the autumn and holiday seasons.
Pictured (Shutterstock): Gucci boutique in Las Vegas
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