From left to right: Julia Hughes (president of the USFIA), Auggie Tantillo (president & CEO of the NCTO) and Robert Antoshak (managing director of Olah Inc)

From left to right: Julia Hughes (president of the USFIA), Auggie Tantillo (president & CEO of the NCTO) and Robert Antoshak (managing director of Olah Inc)

A rapidly changing economic and political climate, the relationship between trade and job creation in the US, plans for a Border Adjustment Tax (BAT), rewriting the North American Free Trade Agreement (NAFTA), and the Trans-Pacific Partnership (TPP) were all included in a panel discussion yesterday (9 February) looking at the potential impact of key trade issues on the apparel and textile industry.

Streamed live on just-style from Washington DC, host Robert Antoshak, managing director of Olah Inc, was joined by Julia Hughes, president of the US Fashion Industry Association (USFIA), and Augustine Tantillo, president and chief executive of the National Council of Textile Organizations (NCTO).

Of President Donald Trump's stance on bringing jobs back to the US, Hughes believes the rhetoric has been "a little misguided."

"I appreciate the thought and the belief that we want to maintain jobs here in the US, because certainly from the apparel and brand side, the jobs here in the US are jobs that are created by trade. The high paying jobs are product development, design, the creative outlook for brands, logistics, supply chain, sourcing…and when we've done analysis of those jobs, 70% of the value of imported products is actually jobs here in the US. So manufacturing off-shore does support jobs here too."

Hughes also discussed the President's plans to revamp the US tax system with the introduction of a border adjustment tax, which some in the industry believe could hugely complicate apparel sourcing for the US market.

"Of course, tax reform is something that needs to happen, but the border adjustment tax proposals that have been out there so far, while they're helpful for manufacturers, for those of us in the service sector [mean] we will not only be paying the highest duties but now not also be able to deduct the cost of those goods. Also, to be paying higher tax rates for some companies, clearly that system isn't going to work; it's going to raise prices for the consumer and it'll raise the dollar, which is not necessarily going to be good for our exporters."

Tantillo agrees the need for a debate and policy review of the corporate tax structure is "long overdue," and that "the burden to our tax structure should be reduced."

He adds: "One way to achieve that is to take a look at the border adjustment tax. There is a lot of confusion and panic but we should note that the US is the only major economy in the world that does not have a border adjusted tax arrangement."

Aside from the border adjustment tax, trade deals have become a primary focus for Trump who says says he wants to either renegotiate or replace the North American Free Trade Agreement (NAFTA) deal between the US, Mexico and Canada.

Hughes concurs there is a need to update the trade deal – but questions what form that will take.

"We are certainly talking with our members about improvements to NAFTA, and it sounds as though, in this case, there is going to be a lot of give and take and input from industry so we're ready to take part in that. We are a little concerned we may need to be defensive to protect the things that are working in this western hemisphere supply chain, but it's a discussion we're ready to have."

Tantillo also supports the continuation of NAFTA but believes in the need for a review and upgrade.

Turning to the Trans-Pacific Partnership (TPP), from which President Trump has extracted the US, Tantillo says he is unsure if it will return in its previous form.

"It is in a very, very deep hibernation. It may not come out of that hibernation, but it appears it may take a different form. The President has said he is more inclined to do bilateral agreements, so if you take the countries within the TPP structure – most of them already have a bilateral agreement with the US, or an FTA. The countries that did not – Japan, Vietnam, Malaysia etc – would they be eligible or good candidates for bilateral? Some of them, I don't think so. But you will probably see some movement on a Japan-US bilateral [agreement]. But for the time being, I think it's going to be NAFTA and maybe some bi-laterals."

Click here to listen to a replay of the panel discussion.