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China Leads Pandemic-Fueled US Apparel Imports Nosedive in First Half

It was a first half to forget for U.S. apparel importers.

With their businesses devastated by the economic impact of COVID-19, domestic apparel importers decreased their shipments from foreign suppliers by 30.37 percent compared to the same period in 2019 to $27.88 billion. Many companies have owned up to cancelling or slashing orders from factories as the economic fallout from the global pandemic took its toll.

Data released Wednesday by the Commerce Department’s Office of Textiles & Apparel (OTEXA) showed substantial declines in imports from every Top 10 supplier except Cambodia, which eked out a 3.44 percent gain in the first half to $1.25 billion.

Still the top supplier in the first six months of 2020, China’s apparel imports to the U.S. tumbled 49.09 percent to $5.77 billion. A new study from the United States Fashion Industry Association (USFIA) said the coronavirus crisis and the trade war pushed U.S. fashion companies to reduce their “China exposure” further.

“China most likely will remain a critical sourcing base for U.S. fashion companies,” the USFIA study said. “However, noneconomic factors, such as the reported forced labor in Xinjiang, could complicate companies’ sourcing decisions. Benefiting from U.S. fashion companies’ reduced sourcing from China, Vietnam and Bangladesh are expected to play a more significant role as primary apparel suppliers for the U.S. market.

Executives surveyed said while “China plus Vietnam plus many” remains the most popular sourcing model, around 29 percent indicated they were sourcing more from Vietnam than from China in 2020, up further from 25 percent in 2019.

Vietnam, the No. 2 apparel supplier for U.S. retailers and brands, posted the smallest decline among the top apparel-producing countries, with imports falling 11.12 percent to $5.66 billion in the period, according to OTEXA.

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The USFIA study said as U.S. fashion companies are sourcing relatively less from China, they are moving orders mostly to its competitors in Asia. All respondents say they have “moved some sourcing orders from China to other Asian suppliers” this year, up from 77 percent in 2019.

Among the top Asian suppliers, OTEXA reported imports from Bangladesh fell 19.73 percent in the half to $2.47 billion, Indonesia’s shipments declined 20.33 percent to $1.82 billion, India’s were down 32.09 percent to $1.54 billion and Pakistan’s decreased 17.27 percent to $585 million.

The USFIA survey noted that there is no clear evidence suggests that U.S. fashion companies are sourcing more from the Western Hemisphere due to COVID-19 and the U.S.-China trade war. However, executives have pointed out that the pandemic crisis has so skewed data that forecasting future trends based on it is not possible.

Among the top Western Hemisphere suppliers, imports from Mexico fell 37.21 percent in the period to $1.01 billion, shipments from Honduras were down 47.9 percent to $682 million and those from El Salvador decreased 48.13 percent to $460 million.