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July 14, 2022

US apparel sector urges end to Section 301 Tariffs to tackle rising US inflation

The American Apparel & Footwear Association (AAFA) tells Just Style an end to Section 301 Tariffs is the solution to rising US inflation levels as official June figures reveal overall inflation is up 9.1% versus last year with apparel increasing 5.2%.

By Laura Husband

The AAFA believes the US Government ending Section 301 tariffs on basic consumer goods like apparel and shoes could be a quick-fire solution for tackling rising US inflation levels, however apparel industry consultant Robert Antoshak predicts the US Federal Reserve will opt to raise interest rates.

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The data released by the US Census Bureau yesterday (13 July) shows the all items index increased 9.1% for the 12 months ending June, which is the largest 12-month increase since the period ending November 1981. It was a similar story for the apparel index, which increased 5.2% on a 12-month basis and has experienced increases on a monthly basis with a rise of 0.8% in June, following a 0.7% increase in May.

The AAFA notes that all apparel and footwear numbers are up versus June 2021, particularly infant and toddlers apparel (10.0%), men’s apparel (8.1%), juvenile footwear (6.7%), and women’s footwear (6.0%). Plus, footwear across the board is up versus 2019, led by juvenile footwear (9.9%), men’s footwear (9.6%), and women’s footwear (5.2%).

The AAFA’s president and CEO Steve Lamar explains: “Tariff-fuelled inflation continues to damage our economy by raising prices and dampening consumer sentiment. President Biden can stop this vicious cycle by deploying one obvious tool that he has so far not used – cancelling Section 301 tariffs on basic consumer goods like clothes, shoes, and backpacks.”

He points out this action could be taken immediately, and it would also effectively target an aggressive supply chain cost that is regressively impacting lower income Americans.

Antoshak makes the point that inflation has taken hold in most major products and services in the economy. He says: “And it’s more than just food and fuel,” adding that prices for all goods and services excluding volatile food and fuel stood at an annualised rate of 5.9 percent.

He believes all of this “virtually guarantees the Federal Reserve will raise interest rates this month in an effort to tame inflation”.

However, he highlights: “By doing so, the likelihood of a recession will become more probable, as consumers and businesses pull back on purchasing due to rising prices and higher costs for borrowing money.”

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Free Whitepaper
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What is the impact of historically high inflation on the UK consumer landscape?

The average UK consumer is experiencing a severe cost-of living crisis as inflation surges to a forty-year high and the price of goods continues to rise. This shock is the result of the sharply increasing costs of commodities, energy, and the ongoing conflict in Ukraine, and is threatening FMCG manufacturers, retailers, and foodservice operators’ ability to survive and grow. Inflation will have a profound effect on many consumer-facing industries in 2022 and beyond. Consult GlobalData’s new whitepaper, Inflation in the UK: The Impact of Historically High Inflation on the UK Consumer Landscape, to better understand shifts in consumer behavior and their impact on spending patterns, as well as the implications for UK businesses. This whitepaper covers:  
  • Why has global inflation returned with a vengeance?
  • What is the current inflation situation in the UK?
  • What impact is inflation having on UK retail sales?
  • What tactics are businesses relying on to tackle the effects of high inflation?
  • How are consumers changing their behaviors to cope with the higher cost of living?
  • Which industry sectors are most vulnerable to reduced consumer demand?
  • How is the government responding to high inflation?
  • How long will high inflation last in the UK?
  • How can your company survive and thrive in a high inflation environment?
Enter your details here to receive your free whitepaper and ready your business for these increasingly uncertain times.
by GD50 Custom
Enter your details here to receive your free Whitepaper.

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