If this were just about the kilt and if this were a really important job, I'd give strong consideration to trading for pants.

But you have already told us that the relationship problems go well beyond the kilt. Getting rid of the kilt won't fix the underlying problem. In fact, it will make things worse.

OK so say you're a wolf. Another wolf in the pack approaches you and starts posturing herself dominantly over you. You roll over and submit to the other wolf. What have you just done? You have acknowledged that the other wolf is superior to you, and you have announced it to the rest of the pack. The social dynamics will be very different from this point on, as you will be expected to behave accordingly when around the alpha bitch.

It's the same way in the business world. She doesn't care about the kilt. She is using the kilt as an easy way to establish her dominance over you. Once you let her above you, you will never get her off again and your position will be very bad for the rest of your time there. She will continue to assert her dominance over you in small symbolic ways.

That said, I'd be more inclined to push back. Delicately but assertively. This is your national dress, you are proud to wear it, and to imply to you otherwise is discriminatory and offensive to a whole nationality. Think of things like this... "If I were an Indian, would you object to me wearing a dhoti kurta to work?"