Led by large increases from Bangladesh and Indonesia, U.S. apparel imports rose 24.72 percent in the first quarter of 2022 compared to the same period last year to 8.35 billion square meter equivalents (SME), the Commerce Department’s Office of Textiles & Apparel (OTEXA) revealed Wednesday.
Imports from Bangladesh, the No. 2 supplier to American brands and retailers by volume, jumped 50.12 percent to 0909 million SME in the period, while shipments from Indonesia increased 46.83 percent to 376 million SME.
Apparel imports from No. 1 producer China were up 25.64 percent–about average among the Top 10 suppliers–from January to March compared to a year earlier to 2.85 billion SME. This comes despite ongoing tariffs and a move by sourcing executives to expand manufacturing beyond China.
Steve Lamar, president and CEO of the American Apparel & Footwear Association (AAFA), speaking at the Sourcing Journal Global Outlook Conference last month, said there’s “a lot of frustration coming from the administration and from Congress about the lack of progress…in the case of tariffs and coming up with a viable tariff exclusion process.”
No. 2 supplier Vietnam seems to have slowly pulled out of its production rut that saw factory closures and backlogs, shipping 18.11 percent more goods in the first quarter year over year to reach 1.36 billion SME.
Among other top Asian suppliers, imports from India rose 34.24 percent in the quarter to 415 million SME, while shipments from Cambodia were up 14.98 percent to 371 million SME and imports from Pakistan increased 22.59 percent to 257 million SME.
The renewed push for nearshoring were evident with the increases in imports from the rest of the Top 10 suppliers. Mexico’s imports to the U.S. were up 11.87 percent to 214 million SME, while Western Hemisphere neighbors Honduras and El Salvador saw increases of 9.21 percent to 212 million SME and 7.41 percent to 164 million SME, respectively, in the period.
Lamar noted the rising interest in doing more business in Central America.
“One of the things that a lot of our members are telling us is they’re diversifying out of China and they’re looking to do more nearshoring,” he said.
While the Central American Free Trade Agreement does present some important opportunities, there aren’t enough investments right now to “move the needle,” according to Lamar. “One of the things we’re trying to do, and we’ve launched a coalition to address this, is to really engage policymakers and frankly, all stakeholders to find ways to incentivize not just the trade, but also the investment.”
A recent meeting between the National Council of Textile Organizations (NCTO) in conjunction with regional textile industry associations and hosted by Jose Fernandez, United States Under Secretary of State for Economic Growth, Energy and the Environment, brought together U.S. and Central American textile and apparel executives and investors to discuss trade policy priorities that support economic development in the region and bolster a co-production chain that supports more than 1 million textile and apparel workers.
NCTO president and CEO Kim Glas said the U.S. textile industry has invested over $20 billion in the U.S. and billions more in the hemisphere over the last decade to grow economic opportunities in the U.S. and in the region.
On the day of the event on March 17, ThinkHUGE (Honduras, USA, Guatemala, El Salvador) announced $340 million in textile investments in the region, in addition to $680 million of investments in renewable energy production to further sustain this critical supply chain. The goal of HUGE is to facilitate some $10 billion worth of investments to create 500,000 new direct jobs and 1.5 million indirect jobs in the four countries in five years. In its first year, HUGE has mobilized $1.9 billion in new investment to create an estimated 160,000 jobs.
Also on Wednesday, the U.S. Census Bureau and Bureau of Economic Analysis announced that the goods and services deficit was $109.8 billion in March, up $20 billion from a revised $89.8 billion in February. The March increase in the trade deficit reflected an increase in the goods deficit of $20.4 billion to $128.1 billion and an increase in the services surplus of $400 million to $18.3 billion.