In 2016, around 45% of all import duties collected by the US government came from apparel and footwear

In 2016, around 45% of all import duties collected by the US government came from apparel and footwear

Over the past month, Donald Trump and his team failed to offer any clear plan to ensure Americans would "Buy American, Hire American" – while the British government's attempts to clarify the specifics of "Brexit means Brexit" left no-one better informed. Mike Flanagan takes a closer look.

Strategies seem equally unclear about the trade partnerships the UK and US wanted to abandon – although they may become less confusing by the third week of March.

It became very apparent though, that relying on China to fill the void is a fool's game.

The Trump Revolution

There's no doubting the Trump team's commitment to cutting imports, but its vast range of ideas, across a dozen trade-related fronts, is part of the problem.

Three were laid out in general commitments before the November election:

1: Trade policy management. Trump's campaign committed to an "American desk" at the Department of Commerce that would consolidate all trade policy making. This was withdrawn in mid-December, with a spokesman saying Wilbur Ross, Trump's nominee for Secretary of Commerce, "will be our administration's leader on setting many of our trade priorities."

Ross has now started his job. But Trump has given four other direct reports some trade responsibilities: Stephen Vaughn, the designated Acting US Trade Representative (until Trump's nominee, Peter Lighthizer, gets confirmed); Peter Navarro, director of the National Trade Council; Steven Mnucin, Treasury Secretary; and Gary Cohn, Director of the National Economic Council. By 10 March, the world's major media were talking of a "civil war" between Trump's advisors.

2: Border taxes. In June last year the Republican party committed to a programme of border taxes. JC Penney argued on 10 March that the proposal would force it to pay almost twice its annual profit in taxation. Different advocates have described different systems – with Trump tweeting that he didn't like the idea. Ross, almost as soon as he was confirmed, reaffirmed he'd never been "in accord with anything like a 20% border adjusment tax [BAT]."

3: Trade deals. Throughout his campaign, Donald Trump repeated his dislike of big, multi-country trade deals like the Trans-Pacific Partnership (TPP). But on 10 March, US officials briefed they were undecided whether to continue the (Transatlantic Trade and Investment Partnership (TTIP) talks with the EU's 27 members.

In October, Trump also committed to six things he would do on his first day in office:

1: On China. Trump said he would "direct the Secretary of the Treasury to label China a currency manipulator." This commitment has disappeared. Secretary Mnuchin doesn't believe currency manipulation is a priority, and the two seem to have agreed to differ until Treasury officials produce a report in April. Meanwhile, new policies against Chinese imports seem on hold.

2: On foreign trade abuses. Trump said he would "direct the Secretary of Commerce and US Trade Representative to identify all foreign trading abuses that unfairly impact American workers." All we've seen is a 1 March report from Vaughn and Navarro identifying ways America might discourage "unfair" imports that compete with US domestic suppliers. Those ideas are irrelevant in industries, like apparel making, where there's no real US manufacturing and more.

3: On NAFTA. Trump said he would "announce NAFTA renegotiation." He did – but without the legally-required objectives or any timetable. Wilbur Ross says he hopes to give Congress the statutory 90 days' notice by the end of March, and that he wants to concentrate on three things: rules of origin, low Mexican wages and the state of Mexico's currency. Nothing about higher duties. Ross also says NAFTA may be scrapped, and separate deals negotiated with Canada and Mexico. Or not.

But while Ross expects NAFTA talks to be completed by mid-2018, Mexico's Foreign Secretary Luis Videgaray said after a meeting with Gary Cohn that he expects to finish the talks this year.

4: On the TPP. Trump promised to pull out, and he did. But pulling out of a non-existent treaty is merely a gesture...of what, remains to be seen.

5: On regulations generally. Trump would require that "for every new federal regulation, two existing regulations must be eliminated." He's issued that order, but the implications for apparel sourcing aren't clear.

6: On "Buying American." Trump promised to "allow vital energy infrastructure projects [like pipelines] to move forward." He authorised two pipelines that "must use American steel or we're not building one." A week later, his spokespeople admitted that the first pipeline wouldn't use American steel. Frequent statements like this are undermining Trump's credibility with businesses.

Since the election, there have been three other indications of changing government strategy:

1: Greater commitment to Customs enforcement. On 1 March, Acting US Customs and Border Protection Commissioner Kevin McAleenan made it clear to businesses on the department's Commercial Customs Operations Advisory Committee that his major priority was to tighten US Customs enforcement. The same applied to other key law agencies.

His concern is not just about discouraging imports; it's about filling America's tax revenue gap. In 2016, around 45% of all import duties collected by the US government came from apparel and footwear.

2: Naïve assertions about the effect of "easing regulation." Acting Customs Commissioner McAleenan argued the rule-cutting programme Trump committed to in October would save money for importers.

On 3 March, Wilbur Ross insisted he and his colleagues were "up to our eyeballs" looking for rules to undo. But fewer Customs rules, when officials are under pressure for more vigorous enforcement, can only mean fewer ways importers can legally avoid duties and penalties.

At that 1 March meeting, Customs showed no interest in taking responsibility for facilitating international trade as seriously as raising money and discouraging imports.

3: A new preoccupation with the role of trade deals. Navarro wants the US to make trading partners buy more US products – suggesting, for example, that the US might make its imports from Germany depend on Germany buying more motorcycles from the US. The idea seems to have been roundly rejected by both sides of both Houses of Congress.

Four months after Trump's election, there is still no sign of any specific plan to promote apparel exports or discourage their imports. Instead, there are endlessly changing ideas, squabbles between different parts of government, and meaningless promises from a President apparently unable to master his briefs.

For our industry, this Administration seems long on talk, but devoid of action. The only thing we know so far is that there'll be some kind of renegotiated NAFTA implemented after early 2018.

While border taxes remain on the Congressional agenda, exporters to the US should expect to be hit over the next two years.


The UK government has signalled it will trigger the EU renegotiation process around 15 March. But it has a disturbing lack of control over the agenda for the two years of talks leading up to Britain's planned exit.

1: Can it control the UK? There is now the serious prospect of both Scotland and Northern Ireland breaking away from the UK during the Brexit negotiations.

2: The divorce settlement. The EU insists it won't discuss a new trade relationship until the UK agrees to an expensive separation fee. Prime Minister May says in that case she'll walk away from the negotiation and simply adopt the same WTO-governed relationship with the EU as China and the US.

3: No plans for handling May's threat. A multi-partisan Parliamentary committee revealed on 11 March that there simply is no plan for managing trade if Brexit talks break down. Its chairman, a leading Conservative Brexit advocate, accused May's government of a "dereliction of duty." The same day, a leaked Treasury report claimed May's threat carried "the most negative long-term impact" of any option for Brexit.

4: And no credible plan for migrants or Customs clearance under any scenario. Even if the UK negotiates a sensible exit agreement with the EU, there are no detailed plans for ensuring businesses retain adequate access to the EU migrants on whom their prosperity depends.

A substantial proportion of Britain's trade with non-EU countries goes through Continental ports, and at present doesn't need UK Customs clearance. Brexit will lead to a five-fold increase the amount of UK imports and exports needing Customs clearance.

Press reports on 11 March indicated that UK Customs planning for post-Brexit clearance systems is extraordinarily inadequate. Claims on 8 March that British Customs had failed to cooperate with an EU investigation into an alleged EUR5bn fraud over Chinese trouser imports will place more pressure on Britain's generally trade-friendly Customs systems to increase physical inspections of Asian apparel imports.

5: New trade deals. Britain wants to start negotiating other trade deals as soon as it leaves the EU. But it is hard to see the point of seeking deals with a US so obsessively anti-trade as it is under Trump, or with China's current government.

6: Other preference deals. There are so many complex trade issues to sort out over the next two years it is hard to see how the UK will have time to agree its relations with low-income countries like Bangladesh or Morocco that are so important to apparel traders. No government announcement has shown any policy on this.

Rest of the world

1: The jilted – EU
I still believe the repeated insistence in the UK and US that the EU is about to fall apart is just wishful thinking by people who actively dislike the EU. But this will be clearer after elections in Holland (15 March) and France (23 April, possibly with a run-off on 7 May).

2: The jilted – TPP partners
All the TPP partners deserted by the US are gathering in Chile on 14-15 March to discuss future trading arrangements. They will be joined by Korea, Colombia and China.

3: China
Since Trump left the TPP, China's started presenting itself as the great hope of international free trade deals. It is promoting the Regional Comprehensive Economic Partnership (RCEP): a bit like the TPP, without the US, but with India, China, Korea and more SE Asian countries.

But almost everyone in the US – pro-Trump, pro-Obama or just pro-common sense – points out China is, in fact, extraordinarily protectionist.

So does the European Chamber of Commerce in Beijing. On 7 March it said China's 'Made in China 2025' initiative "poses serious problems...for European business" because it includes "policy tools such as subsidies, continued support for inefficient state-owned enterprises, [and] limiting market access for foreign business."

Japanese economists are equally sceptical. Shujiro Urata, a fellow of the Japan Centre for Economic Research and a former economist at the World Bank, on 28 February said China has been unable to "contribute constructively" to RCEP talks over the past five years and would be unable to accept some key TPP chapters.

Britain and the US share a problem: they're planning a complete revolution in their international trade – but using inexperienced politicians to lead that revolution. Some downright silly posturing by EU officials is making Britain's problem worse – and the British politicians handling them are behaving just as foolishly.

Those politicians may grow into their jobs, with time. And they may start giving their business communities the information needed to plan. But I fear both governments have leaders incapable of listening to advice.

I seriously doubt, though, that China will evolve in the next decade into a country capable of providing real leadership to its neighbours and partners.

I'd like to think I'm needlessly pessimistic...