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Euronews
17-07-2025
- Business
- Euronews
The tariff ripple effect on global trade
In this episode of The Exchange, Laila Humairah navigates the current turmoil in global trade from rising tariffs. Marco Forgione, Director General of The Chartered Institute for Export & International Trade, shares his analysis, while US economist Eddie Fishman discusses tariffs as an economic policy. Emeline Nsingi Nkosi visits the UK's Thames Freeport five years post-Brexit. ㅤㅤㅤㅤㅤㅤㅤㅤㅤㅤㅤㅤㅤㅤㅤ ㅤㅤㅤ ㅤㅤㅤ ㅤㅤㅤ ㅤㅤ ㅤㅤㅤㅤ ㅤㅤㅤㅤㅤㅤㅤㅤㅤㅤㅤㅤㅤㅤㅤㅤㅤㅤㅤㅤ ㅤㅤㅤㅤㅤㅤㅤㅤㅤㅤㅤㅤ
Fashion United
24-06-2025
- Business
- Fashion United
Middle East tensions: What will be the impact on fashion's supply chain?
As military tensions escalated between Israel and Iran, global trade held its breath. At the heart of concerns was the Strait of Hormuz, the strategic maritime corridor through which nearly one-third of the world's oil passes. If this passage were to be blocked or seriously disrupted, the repercussions would not be limited to energy markets. The fashion sector, often thought to be far removed from these geopolitical considerations, could feel the tremors suddenly and abruptly. Oil dependent sector The fashion industry is often perceived as light, cosmopolitan and creative. However, its foundations are closely linked to fossil fuels. From the manufacture of polyester - a fibre derived from petroleum - to maritime container transport, the entire supply chain relies on oil, both as a raw material and as a logistical lever. A blockade of the Strait of Hormuz would lead to a surge in the prices of crude oil and liquefied natural gas (LNG), with immediate repercussions on production, transport and distribution costs. Manufacturing clothes would become more expensive, and their delivery to Europe and the US would be slowed and increased in price. Supply chain under tension Since the Covid-19 pandemic, the fashion supply chain has never really regained its balance. Trade tensions, the war in Ukraine, rampant inflation in 2022 and, more recently, disruptions in the Red Sea had already undermined just-in-time production strategies. The new threats looming over the Middle East added an additional degree of uncertainty: they could lengthen delivery times, force carriers to change their routes and push costs up to a critical level. "Any disruption in the Strait of Hormuz would have rapid repercussions on the European manufacturing sector, already weakened by its dependence on Qatari LNG and hydrocarbons in general," warned Marco Forgione, director general of the Chartered Institute for Exports and International Trade, quoted by Euronews. Raw materials and logistics under pressure Textiles are a globalised industry, largely dependent on imports. Cotton, polyester, viscose: these raw materials come from multiple regions, but polyester, in particular, is directly indexed to the price of oil. A surge in crude oil prices would therefore impact not only the costs of synthetic fibres, but also those of the chemical dyes used in fabric dyeing. Moreover, a large proportion of clothing and textile components are produced in Asia - India, Bangladesh, Pakistan, China - and transit through maritime routes now exposed to geopolitical hazards. In the event of disruption in the Strait of Hormuz, carriers would have to bypass the area, which would considerably lengthen lead times and generate significant additional costs, the media outlet Koha noted. SMEs on the front line Most major international brands have sufficient safety stocks and financial resources to absorb, at least temporarily, logistical shocks. This is not the case for small and medium-sized enterprises, young brands or DNVBs (digital native vertical brands), which are often very exposed to cost volatility and the slightest disruption to international flows. "It is certain that business leaders are tearing their hair out, especially the leaders of SMEs, micro-enterprises and small and medium-sized enterprises," Forgione said. "This is yet another episode of uncertainty and upheaval, on top of the US' announcements of tariffs and the current unrest in the Red Sea and the Suez Canal." For these players, every container delay or freight increase can threaten their financial balance. Some companies had also begun to relocate part of their production to the Mediterranean basin - in Tunisia, Turkey, Greece - in a nearshoring approach. But this strategy could also be called into question if geopolitical instability were to spread to the entire region. "You know, anyone involved in a supply chain is really on edge, trying to manage enormous complexity. It's like playing four-dimensional chess, trying to manage all the complexities and pressures you face," Forgione continued. Redefining logistical routes? Faced with this threat, Europe will probably have to accelerate the diversification of its supply routes. Greece, provided it invests massively in its port and rail infrastructure, could become a key logistics platform for goods from Central Asia and Turkey. But such a transformation would require deep modernisation: digitalisation of customs procedures, optimisation of rail networks, improvement of port capacities. At the same time, the most responsive fashion brands could invest more in the automation of their European warehouses and multiply regional distribution centres in order to limit their dependence on the most vulnerable global hubs. Uncertainty sets in A this stage, three trajectories seemed possible. A lasting escalation of the Israeli-Iranian conflict would lead to a prolonged surge in energy prices, major disruption to value chains and persistent inflation in clothing prices. A short but intense crisis would have temporary logistical effects, with tensions on deadlines and margins, but rapid adaptation by rerouting flows. Finally, a return to diplomacy would avoid a major crisis, while strengthening companies' awareness of the lasting fragility of their supply chains. Fashion facing its energy dilemma The Israeli-Iranian conflict, however distant it may seem from stylistic concerns, recalled a structural truth: that the fashion industry remains highly dependent on oil. From synthetic fibres to maritime transport, black gold irrigates the entire value chain. This dependence invites companies in the sector to fundamentally rethink their supplies, making them closer, more diversified and less carbon-intensive. A strategic imperative, but also an economic and ecological necessity. This article was translated to English using an AI tool. FashionUnited uses AI language tools to speed up translating (news) articles and proofread the translations to improve the end result. This saves our human journalists time they can spend doing research and writing original articles. Articles translated with the help of AI are checked and edited by a human desk editor prior to going online. If you have questions or comments about this process email us at info@
The Independent
29-05-2025
- Business
- The Independent
Trump fury over US court bid to block tariffs – as experts warn uncertainty could hit economy
A cloud hangs over the global economy, experts have warned after a bombshell court ruling blocked Donald Trump's tariffs, creating more global economic 'confusion and uncertainty'. Financial markers reacted positively to the unanimous ruling by three judges, but the decision enraged the White House, with Trump's official spokesman Stephen Miller calling it another 'judge coup'. The White House has appealed the decision, but it means all of the president's 'Liberation Day' tariffs now face a protracted legal process that could overshadow trade talks and delay the implementation of existing deals, including with Britain. Only the 25 per cent tariffs on steel, aluminium, and cars are unaffected by the ruling. Chris Southworth, secretary general of the International Chamber of Commerce United Kingdom (ICCUK), said months of legal wrangling would further weaken economic confidence. He said: 'It just puts a whole cloud over the top of any negotiation with the US because it's unclear what the US is negotiating and what their position will be from a legal standpoint. 'The problem is, these tariffs change almost every day with the US at the moment, and this uncertainty isn't good for business.' Marco Forgione, director general of the Chartered Institute of Export and International Trade, is also worried about the impact. He said: 'It's clear that we live now in a time of growing uncertainty. But businesses, especially our world-leading food and drink producers, should not rush to react. Whatever the outcome of the legal appeal, keeping calm is the best approach. 'The UK must keep backing open, rules-based trade to give our exporters the certainty they need to succeed.' Trade economist Simon Evenett told The Independent that the ruling could mean tariffs on sensitive sectors such as cars, steel, aluminium and pharmaceuticals intensify instead of coming down, as they're not covered by the judgement. He said: "Britain's principal interests lay in the area of cars, steel, aluminium and pharmaceuticals. All of these are covered by investigations under national security and are not covered by the ruling yesterday. This means the risks to the UK in those sensitive sectors remain, and are likely to intensify.' However, an ally of the Trump administration – Andrew Hale, a trade expert from the influential Heritage Foundation – told The Independent that the judges' decision is 'good news' for the UK. Mr Hale described the deal signed by Trump and Sir Keir Starmer earlier this month as 'just a framework document with very little in it'. He added: 'It was meant to be a start for further trade negotiations and deal with some of the tariffs. So [the ruling] is good news [for the UK] because it prevents the [Trump administration] because it is detrimental to the Trump administration; negotiations. They cannot use the International Emergency Economic Powers Act (IEEPA) to impose tariffs quickly and broadly as a negotiating tactic in negotiations.' In a speech on Thursday, Sir Keir Starmer defended his deal with Trump despite new question marks over the terms – and revelations the US has yet to lower tariffs on car and steel exports from the UK as originally agreed. The prime minister highlighted how the deal will ultimately help workers at Jaguar Land Rover (JLR), whose jobs had been under threat. But the uncertainty created by levies has already led to smaller firms in the UK abandoning the US market, according to Federation of Small Business (FSB) policy chair Tina McKenzie. She said: 'This court decision offers the possibility of short-term relief for small businesses trading across the Atlantic, many of whom have spent the last few months caught in a tangle of uncertainty, shifting rules and sudden extra costs. In fact, one in five said they had already stopped, or may stop, exporting to the US altogether.' The Commons select committee on business and trade is set to open an inquiry on trade with the US. Labour committee chairman Liam Byrne said: 'There's still considerable uncertainty about when the sector-specific exemptions in the recent deal actually come into effect, and what UK firms need to do to access them. This is a key thing we want to cover next week. On the broader tariffs, my understanding is that these now go back to the previous level.' Meanwhile, Lib Dem leader Sir Ed Davey demanded that the foreign secretary David Lammy summoned the new US ambassador, Warren Stephens to explain the situation. He said: 'The levels of chaos from Trump's economic policy is putting Liz Truss to shame.'
