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Despite TPP Limbo, Vietnam Strengthens Position in US Market

Regardless of TPP’s future, Vietnam continues to strengthen its hold on the U.S. apparel market. Though still the number two source after China, it has gained the most share of any top 10 apparel trading partners, and is on track to ship a record amount of apparel to the U.S. this year.

U.S. apparel imports are down 5 percent on a dollar basis for the first three quarters of 2016, according to the most recent data from OTEXA, the International Trade Administration’s Office of Textiles and Apparel, an indication that brands and retailers began the all-important selling season with tighter inventories and, hopefully, will demonstrate less reliance on heavy promotions to stimulate sales.

Total year-to-date apparel imports were $61.6 billion through September, down from $64.8 billion in the year-earlier period.  Last year, imports for the nine months ended Sept. 30 were 4.7% higher than those of the previous year’s period.

On a square meter equivalent (SME) basis, 2016 year-to-date imports fell by 1.6%, indicating a continuing shift toward lower-cost goods compared to the prior year. The cost per SME has dropped by 3.5% so far this year.

Though still the number two source of U.S. apparel imports after China with 13 percent of U.S. apparel import share, Vietnam has gained 1.7 percentage points of U.S. apparel import share, representing 13.7% of total imports, or $8.2 billion.

Most of this gain has been China’s loss. Though still the largest source of U.S. apparel imports with a 35 percent share, Chinas has lost 1.4 percentage points of U.S. apparel imports in the first nine months of 2016, with its year-to-date apparel shipments to the U.S. totaling $21.2 billion, down 8.6% from the same period last year.

Apparel imports from Cambodia and Pakistan have dropped the most of any top 10 trading partner so far this year, down 14.4% and 12.7%, respectively.

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Imports from CAFTA-DR have picked up nicely in 2016, gaining 0.4 percentage points of share, thanks to an increase in near-shoring that has benefitted El Salvador, Guatemala, Honduras and Nicaragua, all of whom have enjoyed an above-average uptick in apparel exports to the U.S.

Bangladesh, which has edged ahead of Indonesia as the third largest apparel trading partner, has seen its business with the U.S. increase to $4.1 billion this year, due to market gains by fast fashion brands.

Indonesia’s apparel shipments to the U.S. are down by 3.4% so far this year, giving it a 6 percent share.

Other countries enjoying rapid growth in apparel trade with the U.S. in 2016 include Turkey, up 6 percent to $360 million, Madagascar, up 126 percent to $74 million, and Burma (Myanmar), up 97 percent to $53 million.