Will Trump presidency in 2024 be beneficial for the global textile and apparel industry? The answer is complex, as Trump's trade policies have historically been marked by protectionism and a focus on rebalancing trade relationships.

Protectionism and its effects on supply chains

Trump's trade approach includes higher tariffs, especially on Chinese imports, to boost domestic manufacturing—a tactic that could disrupt the global textile supply chain. This was previously observed when tariffs on Chinese goods, including textiles, increased under his administration. This policy shift had ripple effects across Asia, with countries like Bangladesh and Vietnam adjusting their trade strategies to compensate for disruptions. However, these changes could make the US market more challenging for Asian suppliers due to higher costs and reduced competitiveness.

Shift from multilateral to bilateral agreements

Under Trump, the US exited the Trans-Pacific Partnership (TPP), reducing competition from TPP member nations for the US market, notably impacting countries like Vietnam, which were positioned to benefit significantly from the TPP. Instead, Trump favored bilateral agreements that could favor US industries, impacting global textile exporters who are dependent on the US market, such as those in Bangladesh and India. Moving forward, Trump's preference for bilateral agreements could reshape the US-textile exporter relationships, but this would be contingent on complex negotiations and potentially restrictive conditions related to labor and environmental compliance.

Cost escalation for US brands

Trump’s ‘America First’ stance emphasizes American manufacturing, often resulting in higher production costs domestically due to labor and raw material prices. While some US brands may look for non-Chinese suppliers, the global industry would face increasing challenges. Brands would need to pass on these higher costs to consumers or absorb them, potentially slowing demand. This factor also pressures apparel brands reliant on overseas manufacturing to reconsider sourcing or absorb tariff-related costs, impacting their profitability.

Compliance pressure

As Trump's trade policy often entails scrutiny of labor conditions, textile suppliers—especially those in Asia—could face increased compliance pressure. The United States-Mexico-Canada Agreement (USMCA), for instance, required North American fibers to support regional supply chains, which could dreduce demand for materials from global suppliers. However, if countries align with higher standards for labor and sustainability, this could offer long-term benefits as brands increasingly seek ethical suppliers. Falling imports and a trade slowdown

Another likely effect is a reduction in US imports, similar to the declines seen during the last Trump administration, where total apparel imports dropped sharply. In 2024, import volume has already shown signs of a downturn, with a 23 per cent decrease compared to previous years, partly due to Trump-era trade policies creating long-lasting effects. Asian exporters may find it challenging to make up for this demand drop without favorable trade terms.

Therefore, Trump's return might stimulate US-based textile manufacturing and protect US workers, it could strain the global textile supply chain. Costs would likely increase for US brands, who may either shift sources or raise consumer prices. Additionally, suppliers in countries like Bangladesh and Vietnam could face competition, compliance pressures, and a volatile trade environment. The impact on the global textile and apparel industry would be a mixed, with higher protectionism creating opportunities domestically but posing obstacles for international partners reliant on the US market.

By Fashionating World
https://www.fashionatingworld.com/new1-2/return-of-trump-era-trade-policies-will-impact-global-textile-industry