Blog: Hannah AbdullaUS imports hit by earlier stockpiling efforts

Hannah Abdulla | 11 February 2019

Latest figures have revealed a fall in US apparel import volumes from nine of the top ten supplier countries in November. China, its biggest apparel supplier, booked flat growth. The picture was hugely different from the previous month where all ten showed positive growth for imports into the US, suggesting retailers were stockpiling earlier to get ahead of the holiday period, as well as bringing in spring merchandise, in a bid to beat a potential increase in tariffs on goods from China.

Meanwhile, US President Donald Trump used his second State of the Union address to call for legislation that would give him more authority to increase tariffs on imports from countries that place restrictions on US goods. In his comments on trade, he said he is following through on his pledge to fight for fair and reciprocal trade by making sure other countries – especially China – are held accountable.

Apparel industry trade bodies have made no secret of the negative impact of tariffs on manufacturers, brands and consumers. Now, a group of US industry associations is calling for an update to a programme that provides duty reductions for goods made with US content. They are seeking an expansion to the so-called 9802 provision that would allow US origin textiles and leather, in addition to US components, to be deducted from the dutiable value of a finished product when it is imported into the United States.

On the other side of the pond, Africa-based countries are looking to leverage the benefits of the impending African Continental Free Trade Area (AfCFTA) agreement which was signed last March by 44 members of the African Union. The agreement is particularly expected to provide a boost to Egypt's garment industry – paving the way for more joint ventures and partnerships, and facilitating the exchange of goods, services and skilled human resources but logistics and government red tape will pose a major challenge, industry execs warn.

Costs are another hurdle to potentially major exporters in the Middle East and Africa region. Jordan, one of the US's biggest exporters of garments, is expected to generate a total of US$1.8bn in exports during 2018 up 9.6% on a year earlier. However, costs incurred by the country's garment sector including energy prices and customs duties for inputs and taxes threaten the country's position as a manufacturing and outsourcing hub.

Sustainability continues to be a key challenge for the apparel industry, and a new piece of research has expressed concerns that home-based garment workers in India are "invisible" and "exploited" by major fashion retailers in the US and EU.

The welfare of Malaysian garment workers has also come under the spotlight. A group comprising 2,000 retailers, importers, brands and associations from more than 40 countries has written to the Malaysian government to express concerns over allegations around the abuse of migrant workers in the country. The "steadily growing" allegations include unsafe working conditions and low pay, as well as charges of workers being at risk of debt bondage and modern slavery.

In terms of resource sustainability, the certification of Pakistan's first organic cotton bale has been hailed as a "major breakthrough" in the country's cotton sector, marking the first step towards the potential development of an organic cotton supply chain in the South Asian country.

But when it comes to breaking fibres back down for reuse, a lot of work needs to be done says UK-based Waste and Resources Action Programme (WRAP). Its research into fibre-to-fibre recycling says improvements are needed in a number of areas including supply chain integration and work to encourage demand from brands, retailers and consumers before the industry can move to a more circular business model.

In an effort to encourage manufacturers to play their part when it comes to sustainability, denim trade show Kingpins will, in future, require all exhibiting denim mills to meet or exceed standards in the areas of corporate social responsibility (CSR) and environment and chemical usage. Kingpins says it believes industry trade shows are in a position to simultaneously help the denim industry be more responsible and support brands and retailers choose best-in-class suppliers by requiring exhibitors to comply with the highest industry standards.

Numbers were out this week from Coach owner Tapestry which cut its full-year guidance. US brand Ralph Lauren, delivered a more upbeat set of third-quarter results and Columbia Sportswear, Urban Outfitters and Skechers also published their fourth quarter financial results.


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