President Trump said  the aim is to further strengthen the trade relationship between the US and the EU

President Trump said the aim is to further strengthen the trade relationship between the US and the EU

The American apparel and footwear sector has welcomed the news that the US and the European Union are to hold talks to "work toward zero tariffs, zero non-tariff barriers, and zero subsidies."

During a joint press conference with President the of the European Commision, Jean-Claude Juncker yesterday (25 July), US President Donald Trump said the aim is to strengthen the trade relationship between the two regions, which already have a US$1 trillion in bilateral trade – the largest anywhere in the world. 

"We want to further strengthen this trade relationship to the benefit of all American and European citizens," the US President said.

"This is why we agreed today, first of all, to work together toward zero tariffs, zero non-tariff barriers, and zero subsidies on non-auto industrial goods."

Also in the pipeline are plans to reduce barriers and increase trade in services, chemicals, pharmaceuticals, and medical products, strengthen "strategic cooperation" with respect to energy, and "join forces" to protect American and European companies.

The Presidents also agreed to launch what Trump called a "close dialogue" on standards, in order to ease trade, reduce bureaucratic obstacles, and slash costs.

For Rick Helfenbein, president and CEO of the American Apparel & Footwear Association (AAFA), the moves are certainly a step in the right direction.

"After months of working in an unstable business environment, we are glad to hear that our nation will resume civilised conversation with some of our closest trading partners, and that threats of new and additional tariffs will not be issued during these negotiations," he said. "Of course, if these trade barriers are removed, it would be a boon for Made in USA."

However, Helfenbein noted there has been no move as of yet to resolve the retaliatory tariffs that affect the apparel and footwear industry. "It is critically important to remember that the administration has developed some serious contentious relations with other trading nations which remain unresolved, including with our top three trading partners – China, Canada, and Mexico," he said.

"Wherever punitive tariffs on US imports remain, and wherever there are still lingering threats, and wherever supply chains are forced to re-align, the American consumer will continue to foot the bill. Americans can expect inflation, they can expect prices to rise, they can expect sales to fall, and ultimately they can expect jobs to be lost while these threats persist."

The US and the EU have been embroiled in a tit-for-tat tariff spat since punitive tariffs from the Trump administration were applied to imports of steel and aluminium, which triggered EU plans to implement higher duties on US products, including clothing. 

The measures have sparked concern from US retailers such as jeans giant Levi Strauss & Co which raised concerns over the impact on US jobs, the supply chain, and the cost to the consumer last month.

Separately, President Trump this week threatened to impose tariffs on all US$500bn of imported goods from China as part of the US' spat with the manufacturing giant. The warning came just weeks after the administration released a list of new items to be hit by a 10% tariff – on top of $34bn worth of Chinese goods hit by additional US tariffs of 25% at the beginning of the month.

Click here for a timeline of Trump's track record on trade.