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Another Bad Month for Chinese Apparel Imports in November, as Erosion Continued

The diversification of apparel sourcing away from China continued in earnest in November, even before companies knew potential increases in tariffs in December were cancelled.

According to new data released Tuesday by the U.S. Commerce Department’s Office of Textiles & Apparel (OTEXA), U.S. apparel imports from China were down 31 percent in November to a value of $1.38 billion compared to $2 billion a year earlier. This followed a 35 percent plunge in October to a value of $2.03 billion from $3.12 billion the prior year.

In volume, apparel imports from China fell 20 percent to 678.62 million square meter equivalents (SME) from 852.15 billion SME in November 2018, according to OTEXA. It followed a 30 percent volume declined the prior month.

This contributed to the trade deficit with China decreasing $2.2 billion to $25.6 billion in November. Exports increased $1.4 billion to $8.9 billion and imports decreased $0.8 billion to $34.5 billion, according to the U.S. Census Bureau and the Bureau of Economic Analysis.

The U.S. trade deficit was $43.1 billion in November, down $3.9 billion from $46.9 billion in October, the bureaus also reported. The decrease reflected a decline in the goods deficit of $3.9 billion to $63.9 billion and a decrease in the services surplus of less than $100 million to $20.8 billion.

While the erosion of apparel sourcing from China by U.S. brands and retailers has been ongoing throughout the tariff-driven U.S.-China trade war, the dramatic drop-offs in the past few months were driven in part by companies bringing goods in before the Sept. 1 imposition of 15 percent tariffs on Chinese imports.

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“People tried to lock on and get their product in early this year,” Julia Hughes, president of the U.S. Fashion Industry Association, said.

The year-to-date figures are likely more indicative of the shifts in sourcing caused by the threat of increased prices and political strife, and the imperative to reduce risk even as many firms still prefer Chinese production quality to most competitors.

U.S. apparel imports from China for the first 11 months of the year fell 7.59 percent to a value of $23.51 billion. This brought China’s import market share–still in the top slot–down 6.63 percent to 30.25 percent in value terms for the year through November.

Suppliers, largely Asian, are stealing away that market share, but Western Hemisphere makers also have gained as well. Apparel shipments from No. 2 Vietnam rose 10.37 percent year to date to $5.51 billion, but were down 12 percent to $281.94 million for the month compared to November 2018. Vietnam’s market share stood at 15.93 percent, a 10 percent gain for the year.

The move by importers to bring goods in early, as well as fears of holding too much inventory, led to a 9.4 percent decline in apparel imports from the world in November to $1.83 billion from a year earlier. Year-to-date apparel imports were up 0.3 percent from the same period in 2018 to $25.83 billion.

Among other top Asian suppliers, imports from Bangladesh increased 10.09 percent so far this year to $5.51 billion, as shipments from India rose 6.73 percent in the period to $3.81 billion, imports from Cambodia were up 11.41 percent to $2.49 billion and shipments from Pakistan gained 5.99 percent to $1.33 billion.

In the Top 10 Western Hemisphere suppliers, imports from Mexico fell 6.13 percent year to date to $2.92 billion and El Salvador’s shipments were down 2.74 percent to $1.7 billion, while imports from Honduras increased 9.52 percent to $2.56 billion. Overall shipments from the Western Hemisphere rose 1.28 percent to $13.2 billion in the period.

On a smaller scale, imports from Sub-Saharan Africa countries were up 16.66 percent in the first 11 months of the year to $1.33 billion. Key contributors included Kenya, Madagascar and Ethiopia.