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Denim’s Nearshoring Wave Kept Rising in September

Rivet’s 2021 winter issue has dropped! This in-depth issue examines the steps the global denim industry is taking to minimize its impact on the environment, from implementing zero waste production and design processes to establishing greenhouse gas emissions goals aligned with the Paris Agreement.

For U.S. retailers and brands, the nearshoring of denim apparel production looks to be gaining momentum.

For the year to date through September, blue jeans imports from Western Hemisphere countries to the U.S. rose 43.46 percent compared to the same period in 2020 to a value of $610.5 million, according to new data from the Commerce Department’s Office of Textiles & Apparel (OTEXA). This surpassed the 28.56 percent imports increase from the world, reaching $2.54 billion.

Leading the way was No. 2 jeans supplier Mexico, posting a 46.53 percent hike in the comparable nine-month period to $471.78 million. The countries of the Central American Free Trade Agreement (CAFTA) combined for an increase in imports of 32.69 percent to $111.63 million.

Among the CAFTA countries, shipments from Nicaragua rose 34.57 percent in the period to $91.56 million, while imports from Guatemala were up 24.73 percent to $18.56 million. Colombia joined in the regional growth, with its shipments up 25.52 percent year to date to $22.15 million.

“The Western Hemisphere supply chain for textiles and apparel is a core pillar of the partnership between the United States and the countries of the Dominican Republic-Central America-United States Free Trade Agreement,” Deputy United States Trade Representatives  Sarah Bianchi said at a roundtable discussion last week with senior U.S. textile executives. “The CAFTA-DR rules of origin provide the certainty needed by industry to invest and expand operations in a way that promotes economic opportunity for both U.S. workers and those in the region.”

Kim Glas, president and CEO of the National Council of Textile Organizations, said the U.S. textile industry has invested over $20 billion in the United States and billions more in the hemisphere over the past decade to grow economic opportunities in the U.S. and in the region.

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“Onshoring and nearshoring this critical supply chain is essential,” and “further investments will be announced soon,” Glas said.

Goods imported from the CAFTA countries and Mexico through the United States-Mexico-Canada Agreement are eligible for duty-free status. The same is true for many Sub-Saharan Africa countries under the African Growth & Opportunity Act (AGOA), and while the region showed a 9.55 percent rise in the period to $109.6 million, many suppliers are having problems.

Last week, President Biden said Guinea and Mali were being cut from the AGOA program for unconstitutional change in governments, and Ethiopia was being removed for gross violations of internationally recognized human rights being perpetrated by the government. Showing strength from the region were Lesotho and Madagascar, while Ethiopia and Kenya saw drop-offs.

Imports from top jeans supplier Bangladesh increased 31.4 percent to $520.16 million in the period, while Asian rivals Vietnam saw tepid 4.23 percent growth to $278.69 million after being flat year to date the previous month, and shipments from China picked up the pace with a 15.02 percent gain to $274.63 million.

Among other Asian Top 10 suppliers, imports from Pakistan were up 63.4 percent in the period to $275.9 million, shipments from Cambodia rose 14.51 percent to $114 million and imports from Sri Lanka were up 27.98 percent to $48.14 million. Rounding out the Top 10 was Turkey, which has seen its imports to the U.S. soar 69.98 percent so far this year to $49.14 million.