;
Home / Knowledge / News / Apparel/Garments / US exit from NAFTA may cost $15.8 bn to retailers: Report
US exit from NAFTA may cost $15.8 bn to retailers: Report
15
May '18
US exit from NAFTA may cost $15.8 bn to retailers: Report
The near-term cost to retailers of US’s exit from North American Free Trade Agreement (NAFTA) is estimated at $15.8 billion, according to a study released recently. The report quantifies the impact of a potential withdrawal of US from the treaty and outlines what changes US retailers should expect in the event that the country exits from the pact.

The study called ‘How NAFTA Affects US Retail’ by global strategy and management consulting firm, A.T. Kearney, points to how the American retail landscape is in danger of being undercut. It quantifies direct and indirect margin impact across all sectors of retail, including apparel and footwear.

With the retail industry importing $182 billion of goods from NAFTA partners, the cost to retailers could amount to as much as $15.8 billion in added tariffs and reduced margins. Additionally, the study quantifies the impact on retail employment, projecting losses of over one hundred thousand jobs within the next three years, adds the report.

"The three macro areas we researched were tariff increases, reduced consumer spending, and lost jobs, each and collectively amounting to losses of billions of dollars and displaced lives," said Johan Gott, A.T. Kearney principal and co-author of the study. "Retailers in different sectors would be affected in different ways—even from product to product. But bottom line, the impact will extend to millions of products imported into the US."

"NAFTA has dramatically influenced the US economy, the retail sector, and Americans' standard of living. From the time it came into force, retailers have gradually become de facto importers, because their customers demand the products that NAFTA allows them to purchase easily, affordably, and with great variety. Retailers, then, are agents without the protections that other importers enjoy," added Gott.

The report suggests that retailers should take steps to quantify the impact on their cost of goods sold, outline a response in terms of several different scenarios that factor in potential impact and become an active voice with policymakers, industry groups and peers to share the real, direct impact that the end of NAFTA would have. They should also be prepared to share confidential data with government officials to demonstrate this impact.

"If the US terminates NAFTA, many importers would likely be covered by other protective sanctions against foreign competition," continued Gott. "US retailers do not face the same kind of foreign competition, but they would be left to face higher costs for the goods they sell—a prospect whose ramifications would reverberate throughout the US economy."

This study, undertaken by A.T. Kearney for the purpose of calculating the impacts of a US withdrawal from NAFTA, was done in partnership with the National Retail Federation (NRF), Retail Industry Leaders Association (RILA), and Food Marketing Institute (FMI). The methodology used aimed at quantifying direct cost increases, indirect revenue loss, and jobs impact. (KD)

Fibre2Fashion News Desk – India


Must ReadView All

Myanmar requests EU not to revoke trade preference

Apparel/Garments | On 21st Jan 2019

Myanmar requests EU not to revoke trade preference

Myanmar Government officials and businesses have requested the...

Tanzania spends Sh7 bn to boost cotton production

Textiles | On 21st Jan 2019

Tanzania spends Sh7 bn to boost cotton production

Tanzania has injected Sh7 billion for distribution of insecticides...

India to soon have own standard for apparel size: minister

Apparel/Garments | On 21st Jan 2019

India to soon have own standard for apparel size: minister

India will soon roll out a size project for Indian apparel on the...

Interviews View All

Headhonchos, Textiles & allied industry

Headhonchos
Textiles & allied industry

Textiles industry is always in the forefront in accepting latest technology

Asim Dalal, Indo Count Retail Ventures

Asim Dalal
Indo Count Retail Ventures

Today, there is no other emerging market as India, "we make in India and...

Nishank Patel, Shri Dinesh Mills Limited

Nishank Patel
Shri Dinesh Mills Limited

Broad range of fabrics will sell well this financial year

Ashish M Amin,

Ashish M Amin

Premier Looms is a leading provider of cutting-edge machinery and...

Marcus Hardelauf,

Marcus Hardelauf

Germany-based Textechno is one of the leading manufacturers of testing...

Tom Adeyoola,

Tom Adeyoola

Describing itself as the best body shape and garment fit company in the...

Daniel Kaye, RocketLife

Daniel Kaye
RocketLife

<div>RocketLife, an award-winning developer of breakthrough visual...

Pierre Wiertz, EDANA

Pierre Wiertz
EDANA

Pierre Wiertz talks about the vast world of sustainable nonwovens and...

Luis Quijano, Liberty University

Luis Quijano
Liberty University

Focusing on bold patterns and colour palettes, Luis Quijano, a student at...

Ritu Kumar, Label Ritu Kumar

Ritu Kumar
Label Ritu Kumar

‘Classics will return’ "There are a lot of people wearing western clothes ...

Varsha Wadhwa, VW

Varsha Wadhwa
VW

Coming from a family that ran a business of jute and linen mills since...

Yash P. Kotak, Bombay Hemp Company

Yash P. Kotak
Bombay Hemp Company

One of the directors of Bombay Hemp Company, Yash P. Kotak, speaks to...

Press Release

Press Release

Letter to Editor

Letter to Editor

RSS Feed

RSS Feed

Submit your press release on


editorial@fibre2fashion.com

Letter To Editor






(Max. 8000 char.)

Search Companies





SEARCH

Leave your Comments


January 2019

Subscribe today and get the latest update on Textiles, Fashion, Apparel and so on.

news category


Related Categories:

Advanced Search