Apparel imports to the US from China saw the biggest decline of the top 10 major suppliers as fashion brands look to reduce their China exposure.

Of the top ten major apparel suppliers to the US, China booked the largest fall during April of 1.7% to 570.56m while the largest import growth came from Mexico and Nicaragua at 0.7%.

During April US apparel and textile imports fell 22.7% year on year to 7.89bn square metre equivalents (SME).

Imports of textiles fell 18.7% to 6.12bn SME while apparel imports fell 34.1% to 1.77bn SME year on year.

Total apparel imports from the top 10 major supplier countries during April

·        US apparel imports from China saw a year-on-year decline of 1.7% to 570.56m SME.

·        Vietnam saw a 0.6% decline of shipments to the US at 286.57m SME.

·        Bangladesh saw a 0.1% increase in shipment volumes year over year at 166.54m SME

·        India saw shipment volumes rise 0.4% to 105.29m SME

·        Indonesia saw growth of 0.1% to 73.57m SME

·        Of the ten, Cambodia saw the next largest decline during April of 0.9% to 67.10m SME

·        Mexico saw a 0.7% increase in shipment volumes to 59.99m SME

·        While Pakistan booked a fall of 0.3% to 49.25m

·        Honduras booked a 0.1% increase to 44.7m SME.

·        Meanwhile, Nicaragua, the smallest of the 10 importers, booked a healthy 0.7% increase in shipment volumes to 41.76m SME.

What the data tells us

Dr Sheng Lu, associate professor, the Department of Fashion & Apparel Studies at the University of Delaware observes the following from the latest set of trade data from the United States Office of Textile and Apparel (OTEXA).

“First, the significant decline in US apparel import volume reflects the weak US economy and consumers’ hesitancy to purchase clothing amid financial uncertainties. Recent economic indicators also present a mixed picture of the US economy’s growth trajectory. For example, while the US consumer confidence index slightly went up from 68.0 in March to 69.6 in April 2023 (January 2019=100), the advanced clothing store sales index in April fell to 115.6 (Jan 2019=100), the lowest so far in 2023 (e.g., was 120.6 in January 2023). However, since summer is traditionally a peak season for clothing sales, followed by events like back-to-school shopping, there remains hope that US apparel imports may experience a slight recovery at some point in the second half of the year.

“Second, trade data reveals US fashion companies’ seriousness and eagerness to reduce their “China exposure.” Although China remained the top apparel supplier to the US, its market share fell to a new low of 17.9% in value and 30.6% in quantity in the first four months of 2023. Particularly, for the first time in decades, less than 10% of US cotton apparel came from China in March/April 2023, revealing the significant impact of the Uyghur Forced Labor Prevention Act (UFLPA) on US fashion companies’ China sourcing strategies.

Recent data from the US Customs and Border Protection (CBP) shows since the implementation of the Uyghur Forced Labor Prevention Act (UFLPA) in June 2022, a total of 679 shipments amounting to $40.54m have been stopped.

“Third, the trade data suggests US fashion companies continue strengthening their apparel sourcing from Asian countries other than China. Measured in value, about 74.9% of US apparel imports came from Asia in the first four months of 2023, which is on par with 73.5% in 2022. The five largest apparel exporting countries in Asia other than China (i.e., Vietnam, Bangladesh, Indonesia, India, and Cambodia) accounted for 44.7% of US apparel imports in the first four months of 2023, a new high since 2018 (was 35.3%). These countries are among the most popular “alternatives to China” because of their balanced performance regarding production capacity, cost, flexibility, and compliance risks.

“Fourth, US fashion companies are also actively exploring new nearshoring opportunities from the Western Hemisphere. For example, about 17.3% of US apparel imports came from Western Hemisphere countries in the first four months of 2023, up from 15.6% in 2023. That being said, US imports from Mexico and CAFTA-DR members still fell by 6.9% and 16.6% in 2023 from a year ago, given the overall business environment. It will be interesting to observe whether CAFTA-DR and Mexico can further enhance their market shares as the US import demand recovers.

By Just Style