WASHINGTON — China surpassed Mexico as the number one foreign apparel supplier to the U.S. on an annual basis and now controls 17.4 percent of the entire U.S. import market in textiles and apparel, the Commerce Department reported Friday.
For the first time in a 12-month period — this one ended Aug. 31 — China became the top supplier of apparel with imports of 2.78 billion square meters equivalent. It is already the number one supplier of textiles. Total apparel and textile imports from China rose 94 percent on an annual basis to 7.17 billion SME.
Meanwhile, total textile and apparel imports from Mexico fell 6.7 percent to 4.14 billion SME for the 12-month period, while apparel imports from Mexico fell 4 percent in the same time. Mexico has a 9.8 percent share of the U.S. import market.
China is showing no signs of slowing its pace of market share accumulation and continues to be the biggest growth engine behind world trade in textiles and apparel. Total apparel and textile imports rose 0.8 percent to 3.74 billion SME in August against a year ago. That overall import volume marked the highest for the month of August on record, according to Ross Arnold, an international trade specialist at the Commerce Department’s Office of Textiles & Apparel.
Imports of apparel actually fell by 0.9 percent to 1.76 billion SME in August versus a year ago, while imports of textiles rose 2.5 percent to 1.98 billion SME, according to the Commerce report.
China’s import growth continues to be concentrated in product categories no longer restricted by quotas, primarily in non-apparel products. The big growth categories from China include luggage, handbags, blankets, pillow shells and curtains, as well as tents and man-made fiber bags, tarps and awnings, and infants’ apparel.
At the same time China posted huge surges, there were double-digit decreases in August imports of these categories from Mexico, Pakistan, Taiwan, Indonesia and Thailand, according to Arnold.
“Other Central and Latin American countries should take note of the difficulty even Mexico is having with competition from China,” said Charles McMillion, chief economist at MBG Information Services. “It’s only getting worse.”Julia Hughes, vice president of international trade at the U.S. Association of Importers of Textiles & Apparel, claimed Mexico is losing market share to other countries in the Western Hemisphere and not to China.
“Mexico is losing at the same time China is gaining, but the business is going to the Caribbean and Western Hemisphere suppliers,” Hughes said.
Imports from Honduras rose 13.07 percent for the year to date, while imports from the CBI region as a whole increased 8.09 percent for the first eight months of the year. It is important to note that much of the growth in the Caribbean region comes from cotton categories, including woven cotton shirts, cotton trousers and cotton underwear, which are still all under quota for China.
“We are seeing a movement of investment to the [Caribbean and Central American] region,” said Hughes, adding that companies are beginning to take advantage of a trade program for the region that went into effect in 2002.
The most closely watched import categories from China are bras, dressing gowns and robes, and knit fabric. A vocal coalition of cotton, man-made fiber, yarn spinner and fabric manufacturer groups is pressing the U.S. to reimpose quotas on these three categories under special textile safeguard mechanism. The government could issue a decision on the three petitions as early as mid-November.
“China is building such enormous capacity that unit costs will be prohibitively low for competition from anywhere else,” McMillion said. “The supply chain is moving to China and to Asia, generally, and it will choke off production from the Americas and make producing there extremely difficult when quotas are removed.”
For the first eight months of the year, imports of dressing gowns and robes from China skyrocketed 136 percent, while imports of bras rose 78 percent and imports of knit fabric rose 43 percent. Hughes noted that cotton bra imports from the Caribbean and Central America rose 40 percent for the first eight months of the year despite China’s growth in the category, which is not under quota.
“Some countries are doing well, and some are not doing well,” said Stephen Lamar, vice president at the American Apparel & Footwear Association. “That reflects the natural dynamics of the market.”Imports from Vietnam leapt 255 percent for the year to date, while imports from Thailand fell 17.11 percent during the same period. Lamar noted that a China safeguard action is predicated on whether market disruption occurs and the domestic industry is injured, not whether importshave increased.
He also questioned whether any U.S. manufacturers of bras and dressing gowns are complaining about imports from China, the implication being many producers of the products do not want quotas imposed. McMillion, on the other hand, said the textile industry, which has lost thousands of jobs this year, needs the safeguards to stem the flow of jobs to Asia.
“The [benefits of reimposing quotas on China] will be on the margins,” he noted. “We don’t expect the jobs that have been lost to come back [to the U.S.], but safeguards could slow the loss and bring back some to Central America and the Caribbean.”
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