China continues to lose its footing as the major supplier of apparel to the U.S., and Mexico’s standing is on shaky ground, too.
Following patterns established in 2018, the top Asian and Western Hemisphere sourcing countries are losing ground to their neighbors as companies shift their production strategies. The effects of trade rifts with the Trump administration and the reaction by importers to diversify or make changes in the manufacturing plans to avoid risks, tariffs and potential shortfalls in the cost-and-time sensitive industry, are just some of the factors at play.
Apparel goods coming from China to the U.S. fell 2.9 percent in February to a value of $2.01 billion compared to a year earlier, which could be partially attributed to a shift in the Lunar New year calendar. This year, Lunar New year fell on Feb. 5, which meant most factories in the country closed for at least the first two weeks of the month. Last year, the holiday began on Feb. 16, with a somewhat shorter timeframe for closures.
Among major Asian suppliers, second place Vietnam’s shipments to the U.S. rose 7 percent in the month to a value of $1.04 billion compared to February 2018. Shipments reaching U.S. ports from Bangladesh increased 13.6 percent to $504.37 million, while imports were up 6.3 percent to $372.3 million from India and 14.8 percent to $107.46 million from Pakistan.
Elsewhere in Asia, second tier suppliers on the rise included the Philippines, with the U.S. taking in 6 percent more imports to reach $62.23 million, and Sri Lanka, which landed 4.7 percent more goods to at a value of $156.83 million. Indonesia’s shipments fell 1.2 percent to $393.24 million.
Meanwhile, imports from Mexico, which were uneven during 2018—due in a part to uncertainty over the unsure nature of its duty-free status as the North American Free Trade Agreement was being renegotiated—dropped 23.2 percent in February to a value of $257.75 million compared to a year earlier. Now that a deal was reached, the U.S.-Mexico-Canada Agreement, awaits an unsure legislative ratification, causing more angst among brands and retailers.
Countries that are part of the duty-free Central American Free Trade Agreement (CAFTA), many of which are suffering political and civil unrest, had mixed results in the month. Imports increased 14.12 percent in value from Honduras to $208.57 million and 3.4 percent from the Dominican Republic to $65.34 million, while they fell 6.69 percent to $141.85 million from El Salvador and 4.74 percent to $107.47 million from Guatemala.
Alternate sourcing choices also continued to be key as the sector diversifies production. Apparel imports from Jordan jumped 21.61 percent year over year in February, to reach a value of $118.83 million and shipments arriving from Egypt rose 13.2 percent to $69.04 million.
These developments came in a slow month for U.S. apparel imports. Global shipments to the U.S. fell 0.4 percent in volume to $2.27 billion square meter equivalents. For the year to date, imports were up 5.12 percent in value to $14.22 billion compared to the same period in 2018, thanks to surge in January.