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Apparel Production Patterns in Play, as China Decline Continues

U.S. apparel importers have adapted to the ongoing trade war with China that flared again this week with the threat of deeper and broader tariffs by turning elsewhere for their goods.

Apparel imports from China dipped 0.7 percent in the first quarter from same period in 2018 to a value of $5.74 billion, while all other major Asian suppliers showed substantial gains. Western Hemisphere suppliers also increased their shipments in the three months through March, rising 2.62 percent to a value of $3.34 billion.

This came as overall U.S. apparel imports increased 8.3 percent in the first three months of the year for a value of $6.08 billion. U.S. apparel exports also exhibited some strength, increasing 5.04 percent in the period to $1.5 billion.

Among Asian apparel suppliers, imports from Bangladesh surged 16.12 percent to a value of $1.57 billion, while Vietnam’s shipments jumped 13.55 percent in the quarter to $3.23 billion. Imports from India rose 12.07 percent to $1.16 billion worth of goods in the period and Pakistan’s shipments increased 11.54 percent to $355 million. Gains were also made by Indonesia, up 5.76 percent to a value of $1.2 billion, and Cambodia, rising 5.96 percent to $623 million.

In the Western Hemisphere, imports from Haiti spiked 37.5 percent to a value of $98.63 million. Among Central American Free Trade Agreement countries, imports from Honduras were up 9.04 percent to a value of $601 million, as the Dominican Republic’s shipments rose 19.6 percent to $70.01 million and Nicaragua’s were up 14.2 percent to $150.54 million. On the down side, imports from El Salvador fell 2.73 percent to $419 million and Guatemala’s declined 4.9 percent to $117.76 million.

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Imports from Mexico dropped 5.2 percent in value in the quarter to $776 million. Importers have also shown hesitancy to source in Mexico as the U.S. renegotiated the North American Free Trade Agreement with the country and Canada, forging the U.S.-Mexico-Canada agreement late last year. That deal is still pending Congressional approval and could be caught up in the volatile U.S. political environment.

As companies look to diversify their sourcing, several countries have shown significant gains in apparel manufacturing. Among Middle Eastern and African countries, imports from Jordan rose 31.2 percent in the quarter to reach $98.63 million in value, Egypt’s increased 19.91 percent to $242.78 million, Ethiopia’s shipments more than doubled to $17.07 million, Madagascar’s rose 26.6 percent to $19.85 million and Kenya’s were up 13.21 percent to $100.53 million.

Secondary supplier countries in Asia showing gains in the period included Sri Lanka, Thailand and Myanmar. In Europe, countries such as Turkey, Italy and Portugal posted significant increases.