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US Denim Imports Rise as New Wave of Suppliers Gain Ground

Global denim apparel manufacturing is developing in several key hubs—Southeast and Central Asia, Africa and the Western Hemisphere—as the world’s top two suppliers, China and Mexico, continue to lose their hold as the centers of production.

Certainly some of the short-term shift can be blamed on U.S. trade policy and the imposition of tariffs on China and, in the case of Mexico, the threat of tearing up the North American Free Trade Agreement (NAFTA). In the longer term, companies are seeking out lower-cost countries, nations not in the political crosshairs, and places where they can establish fresh factory relationships.

The thirst for denim apparel, of which jeans make up 98 percent of U.S. imports, remains strong. The United States imported $2.47 billion worth of blue denim apparel year-to-date through August, representing a 6.8% increase compared to the first eight months of 2017. China still accounted for 24.68% of those shipments, but the value fell 0.19%, to $600.34 million in the year-to-year period.

Manufacturers say they have been forced by circumstances to diversify their sourcing to avoid problems and balance costs. As Gail Strickler, president of Global Trade at Brookfield Associates, said, “Companies are going to increase their manufacturing in places they are already in and take some production away from China because of the risk.”

Mexico’s denim apparel shipments to the United States were up 0.48% year-to-date through August, to $515.91 million, but its market share for the 12 months fell 2.85%, to 21.3%. Mexico could see some boost now that NAFTA has been renegotiated into the United States-Mexico-Canada Agreement (USMCA), but many companies have already moved their Western Hemisphere production elsewhere and are unlikely to move it back, executives have noted.

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Among the new Asian denim powerhouses, denim imports from Bangladesh increased 11.72%, to $358.73 million in the first eight months of the year; shipments from Vietnam jumped 40.13%, to $178.24 million; imports from Pakistan rose 11.16%, to $155.52 million; and shipments from Cambodia were up 32.8%, to $78.63 million. On a smaller scale—though becoming increasingly significant— denim imports from India jumped 54.54% to $23.94 million.

Several African countries are emerging as key denim suppliers, too. Egypt’s shipments rose 4.03% in the period, to $103.72 million; imports from Lesotho increased 11.23%, to $53,89 million; the amount of jeans coming in from Madagascar were up 21.31%, to $15.42 million; Kenya’s shipments jumped 64.22%, to $11.54 million; and imports from Tanzania gained 34.64%, to $7.48 million.

Imports from Central American countries that benefit from duty-free goods entering the United States under the Central American Free Trade Agreement increased 4.42%, to $87.46 million so far this year. Leading the way were Colombia, which posted a 43.55% hike, to $41.92 million; Guatemala, with a 29.59% increase, to $21.92 million; and Nicaragua, whose shipments to the United States inched up 0.56%, to $64.3 million.