HIGH Street brands such as Adidas and H&M could be hit by Donald Trump's tariffs leading to pain for UK shoppers.
The US President has announced a swathe of hefty tariffs on countries across the world in a giant shake up of global trade.
The UK has been hit with a 10% tariff, the lowest rate.
But higher tariffs slapped on other countries across the world could lead to higher prices for UK shoppers too.
, which lots of US companies rely on to produce their goods, will now face a 46% tariff.
Lots of firms rely on factories in , and for production too. These three countries have been slapped with up to 36% tariffs.
The increase in tariffs will be paid by US companies importing into the country, which in turn will drive up prices for US consumers.
But there could also be a knock-on effect , as these US firms hike up prices here to cover their additional costs.
Shares in companies such as Rolex, and which rely on foreign countries to produce their goods have all dropped since last night.
This is the full list of major brands affected, reports Reuters.
- Rolex
- Burberry
- Nike
- Adidas
- Puma
- On
- Under Armour
- JD Sports
- H&M
It doesn't bode well for fans of these brands in the UK who could see prices hiked.
including Nike, Adidas and Puma will have to hike prices in the US by 20% to defend their profits.
They could also hike prices in the UK as well.
Myron Jobson, senior personal finance analyst at interactive investor, said: “In an interconnected global economy, trade policies rarely operate in a vacuum.
“Trump’s tariffs are often framed as a measure to protect US industries from foreign competition, but many global brands source components and raw materials from countries subject to these tariffs, pushing up costs for these businesses.
“Some, if not all, of these costs will invariably be passed on to customers – not just in the US, but also in the UK and elsewhere, as businesses adjust prices across markets to maintain margins.
“(This means) British consumers could find themselves paying more for everything from electronics to cars.”
How else could shoppers be affected?
There is also the threat that the UK Government retaliates to its 10% tariff by hiking tariffs on US goods into the UK.
These increased tariffs would then likely be passed on to shoppers in the form of higher prices at the checkout.
Shoppers could also be hit with higher prices if the value of the pound falls against the US Dollar.
This would lead to higher import costs for UK businesses which would be passed on to shoppers.
Higher prices at the shops could also see workers demanding higher pay to keep up with the cost of everyday goods.
Businesses may then be forced to make job cuts to cover their costs.
Trump's higher tariffs might not spell bad news for shoppers though.
An increase in tariffs imposed on US companies could lead to firms who usually send their products to the US to ship them elsewhere, including to the UK.
This could lead to a flood of goods entering the UK, leading to greater supply and therefore cheaper prices.
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