Blog:
How brands are mitigating the potential impact of new China tariffs
Beth Wright | 12 August 2019
US apparel brands and retailers may be caught between higher costs and raising prices when it comes to navigating an extra 10% tariff on clothing and footwear imported from China from the beginning of next month – but analysts suggest some are managing to mitigate the potential impacts.
Indeed, at the halfway point of 2019, the fallout of the China-US trade spat on US apparel imports is starting to surface. Growth in shipment volumes from Vietnam and Bangladesh outpaced that of China in the first six months of the year – but imports from China are still edging up and the country's share of the market is virtually unchanged.
And imports at major US retail container ports are expected to continue at near-record levels this month and the rest of the year, despite the new round of tariffs.
But Chinese upstream fibre, yarn and fabric producers are ramping up production as fears grow that the trade war with the US will hurt exports of apparel and other textile products.
Elsewhere, with Levi Strauss having taken the lead on climate commitment, Todd Paglia, executive director at Stand.earth, looks atwhere the rest of the fashion industry stands today.
Apparel giant HanesBrands is introducing new EcoSmart items to its line-up as it explores demand for more environmentally-friendly products and production methods.
While apparel giant VF Corp has announced plans to invest a further US$20m in its FutureLight breathable and waterproof fabric technology, whose launch is just a few months away.
On the acquisition front, UK-based online fashion retailer Boohoo has acquired the online business of the Karen Millen and Coast fashion brands in a GBP18.2m (US$22.1m) deal.
While retail group Sports Direct International has rescued Jack Wills with a GBP12.75m (US$15.5m) bid after the ailing lifestyle brand fell into administration last week.
Meanwhile, Primark has confirmed it is suspending sourcing with several of its supplier factories in Bangladesh following allegations that workers' contracts were terminated unfairly.
And a $2bn class action lawsuit filed by victims of the collapsed Rana Plaza factory building in Bangladesh against Canadian retailer Loblaws has been dismissed by the Supreme Court of Canada.
Across the border in India, workers have been taking part in demonstrations against labour law reforms introduced by the Modi government that they say put ease of doing business ahead of worker welfare.
Striking a more positive note, compliance rates on core labour standards in Vietnam's garment sector have significantly improved on last year – but violations continue to be found in areas such as worker protection, overtime and occupational safety and health.
Meanwhile, in other news, a new project is to map Telangana's entire cotton supply chain; Gap Inc is taking steps to ensure it reaches its 2020 emissions reduction targets; and Debenhams has named chief restructuring officer Stefaan Vansteenkiste as its new CEO.
Sectors: Apparel, Fibres & fabrics, Finance, Footwear, Manufacturing, Mergers & acquisitions, Retail, Social & environmental responsibility, Sourcing, Technology, Trade
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