Blog: Hannah AbdullaCentral America leads US apparel imports surge

Hannah Abdulla | 9 September 2019

The volume of apparel imported into the US saw a double-digit growth surge month-on-month in July as retailers stocked up for the back-to-school season and rushed to bring merchandise into the country ahead of scheduled tariff hikes. Growth in shipment volumes from El Salvador and Honduras was highest during the month, with China also booking double-digit gains but Bangladesh seeing a decline.

The US and China have both gone ahead with threats to impose new levies on another tranche of imports – with the US move meaning around US$31bn in textile, apparel and home textile products from China are now subject to an additional tariff of 15%.

President Trump's goal to force brands and retailers to move their orders out of China, at no cost to the US consumer, is the final triumph of fantasy over reality. But where are we going to move production? Will there be an added cost? And if so, who will pay?

Fashion retailer Guess Inc is looking to reduce its dependency on China as it moves to limit the impact to its business of the newly imposed tariffs on Chinese imports into the US, whil e-commerce giant Amazon.com will need to increase prices on products sold in the US by between 2.1-2.6% in order to offset the impact of fresh tariffs announced on Chinese goods.

And Abercrombie & Fitch has moved to quell concerns about the impact the ongoing trade war, along with Britain's exit from the European Union, could have on its business – despite lowering its full-year gross profit forecast.

Meanwhile the British Fashion Council has warned a no-deal Brexit could cost the fashion industry between GBP850-900m (US$1.1bn) if it has to trade under World Trade Organization rules.

The latest Better Buying Index is out and reveals countries with the lowest production costs – Bangladesh, Cambodia, Malaysia, Singapore, Thailand and Vietnam – are the ones whose garment suppliers are most commonly squeezed when it comes to pricing.

In Bangladesh, a target date for the official incorporation of its new workplace safety initiative, the national RMG Sustainability Council (RSC), has been set for 25 November.

And months after taking the reins as president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), businesswoman Dr Rubana Huq tells just-style of her priorities for the next two years – from factory safety to exploring new markets, increasing sustainability, and promoting innovation in the world's second-largest clothing exporter.

On the sustainability front, the vast number of sustainability-focused initiatives already running across the global apparel and textile sectors has a new addition: the Fashion Pact. But does it go far enough to really make a difference in reducing the industry's environmental impact – or just add more complexity and confusion to the issue?

A new Good Fashion Fund is being launched to finance investments in supply chain innovations in India, Bangladesh and Vietnam so that manufacturers can improve their environmental and social impacts.

And Japanese retail giant Fast Retailing is to invest US$1.8m in a new programme with the International Labour Organization (ILO) to improve social security systems and worker environments in Asia.

Also last week, VF Corp, the owner of brands including Timberland and Vans, announced it was to stop sourcing leather and hides from Brazil until it can be sure suppliers do not contribute to environmental harm in the country.

In other news, Lululemon upped its full-year forecast on the back of a double-digit surge in both earnings and revenue during the second quarter and G-III Apparel Group and American Eagle Outfitters also had numbers out.

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