Sino US Relations: The End Is That China Is No Longer The Largest Exporter Of Clothing To The United States

　　 Sino-American Deterioration! China is no longer the largest in the United States Clothing exporting countries ， market share It's being taken by Vietnam!

Humen clothing

Seven months ago, China was still the largest supplier of American fashion companies, but its significant advantage over Vietnam has disappeared due to the decoupling between the coronavirus and the world's two major economies.

According to the U.S. Department of Commerce: in terms of value, the clothing imported by the United States from China has dropped from nearly 30% in 2019 to 20% in the first half of 2020. In Southeast Asian countries, its market share has increased from 16% in the same period to now, which is equivalent to Vietnam. As a result, China's supply chain has been weakened by the increasing tension between China's fashion suppliers and fashion companies. A survey of 25 executives of leading fashion companies conducted by the American fashion industry association in the second quarter found that although most of the goods were imported from many countries, including China and Vietnam, 29% of the respondents said they had bought more goods from Vietnam than China this year, up from 25% last year.

According to data released this week by the office of textiles and apparel of the U.S. Department of Commerce, at least 30% of U.S. apparel imports in the first half of this year came from China in terms of volume.

But crucially, the percentage is well below average, as most Chinese manufacturers and traders have slashed prices to maintain overseas orders and cope with weak demand.

The unit price of clothing imported from China in the United States dropped from US $2.25 per square meter last year to about US $1.88 in the first half of 2020, a decrease of 16%, far higher than the average decrease of 3% of all clothing import prices. So far this year, Chinese suppliers have offered about 30% less than other Asian countries.

As of July this year, the United States has imported about 30 billion US dollars of textiles, clothing and home textiles from China, accounting for 90% of the total imports. Due to the trade war, the United States has imposed a 7.5% tariff on these products on the basis of the normal tariff.

"If trade tensions between the US and China continue to escalate, US fashion companies are likely to further significantly reduce their purchases in China, even though it is not an economic priority," said Lu Sheng, an associate professor of fashion and apparel research at the University of Delaware

One executive surveyed by the fashion industry 'association said they "cancelled orders and deliveries; another said they had" worked with third-party auditors to increase audit strength "to ensure that their imports did not use forced labor.

The deterioration of U.S. - China relations has also accelerated efforts by Chinese manufacturers and exporters to shift some of their production from China to neighboring countries to take advantage of lower labor costs and avoid US import tariffs. However, this shift has slowed down this year due to travel restrictions caused by the pandemic.

"Foreign investment has indeed played a crucial role in helping Vietnam develop and expand its garment production capacity," added dill of the University of Delaware.

According to the data of Vietnam, South Korea and China, the first source of direct investment in textile industry was China and Vietnam.

In recent years, China's exports of finished garments and textile materials to other countries (countries that make garments) have decreased. In the first seven months of this year, China's textile exports increased by 31%, while exports of clothing and accessories fell by 16%, according to the General Administration of customs.

"It is important to recognize that China is playing an increasingly important role as a textile supplier to many Asian apparel exporters," Lu said

Last year, more than half of the textile imports from other countries came from China, which accounted for more than 10% of the value of imports in the previous year.

Although American fashion companies have been reducing their dependence on Chinese products for many years, China will remain a key base for us procurement in the near future, especially after the coronavirus epidemic has prompted many companies to cut costs substantially.

In the Fashion Industry Association survey, about 70% of respondents expect to reduce their purchases from China by 2022, down from 83% last year.

"It's hard for our company to find sources outside China, plus the [product] price points it serves," said one executive "Even with the tax, we can't get the right fabric, price and production elsewhere. Other areas must develop our ability to evacuate. As a result, we are considering all cost cutting measures. "

Source: Aoao finance, chemical fiber Toutiao, global textile network