WASHINGTON — Apparel brands and retailers continued to expand sourcing in Vietnam in December, as the country posted the largest increase in imports to the U.S. among the top 10 suppliers, the monthly trade report released by the Commerce Department showed Thursday.
Indonesia, once considered a strong alternative to China for apparel production, posted the largest decline in apparel shipments to the U.S. for the month.
Overall, apparel and textile imports to the U.S. rose 5.6 percent in December to 4.2 billion square meter equivalents compared with a year earlier, according to Commerce’s Office of Textiles and Apparel. Apparel imports increased 2.2 percent to 1.8 billion SME, while textile shipments grew 8.2 percent to 2.4 billion SME.
The U.S. trade deficit widened to $38.7 billion in December, up from $34.6 billion in November, driven by a $3.5 billion decrease in exports.
Apparel and textile imports to the U.S. from China, the number-one supplier to the U.S., were up 9.7 percent to 2 billion SME in December compared with December 2012. Vietnam posted the biggest gain in apparel imports to the U.S., with a 9.5 percent increase to 191 million SME in December, while Indonesia posted the largest drop of 20 percent to 80 million SME. Vietnam had a 13 percent increase in apparel imports to the U.S. for all of 2013 and Bangladesh’s apparel imports were up 11.2 percent for the year.
“Vietnam is really the only alternative [to China] that has actually worked,” said Nate Herman, vice president of international trade at the American Apparel & Footwear Association. “Costs are going up in Vietnam, too, and they have problems because they have to import 80 percent of their raw materials. But people are still able to make it work. From a cut-and-sew perspective, Vietnam can do virtually everything China can.”
Herman said apparel sourcing in Indonesia has been impacted by protests over the minimum wage and capacity problems.
“I think people were willing to try Indonesia, based on experiences they had 10 to 15 years ago, but they found that the wage issues are different now and that the country does not have the capacity it once had,” said Herman.
China, which controls nearly a 42 percent share of the U.S. apparel import market, had a gain of 4.9 percent to 10.3 billion SME for the year.
“The amount of growth in apparel imports from China is more than the total trade from some of our relatively major suppliers,” said Julia Hughes, president of the U.S. Fashion Industry Association. “Even though we know many sourcing executives have said they are shifting production out of China, it certainly appears China remains a safe haven for sourcing.”
Cambodia, a country beset by strikes and shutdowns over its minimum wage rate, posted a 7 percent decline in apparel shipments to the U.S. in December from a year earlier. But Bangladesh, also struggling in the wake of two major factory tragedies that claimed the lives of more than 1,200 people and minimum-wage strikes, notched a 1.8 percent increase in apparel imports for the month and a 11.2 percent increase for the year.
“We have had strikes in Cambodia and a lot of political uncertainty, so it is not surprising they were down in the month,” Hughes said. “With Bangladesh, we’re really hoping that the situation has stabilized. I really do think that the brand commitments to make systemic changes in Bangladesh is reflected in the trade levels.”