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Apparel Imports From China Slip, Vietnam Gains

China's apparel imports to the U.S. dropped 11.7 percent in January from a year earlier, marking the second consecutive decline from the top supplier, while Vietnam inched closer to surpassing Bangladesh as the number-two apparel shipper to the U.S.

WASHINGTON — China’s apparel imports to the U.S. dropped 11.7 percent in January from a year earlier, marking the second consecutive decline from the top supplier, while Vietnam inched closer to surpassing Bangladesh as the number-two apparel shipper to the U.S.

Vietnam’s apparel imports increased 58 percent to 120 million square meter equivalents for the month from January 2007, as Chinese clothing shipments fell to 609 million SME in the same time period, according to a U.S. Commerce Department report on Tuesday.

The biggest declines in apparel from China were in cotton trousers and underwear, and in socks. Total textile and apparel imports from China fell 3.1 percent to 1.6 billion SME in January.

Meanwhile, apparel imports from Bangladesh fell 3.6 percent to 121 million SME.

China’s decline drove down overall apparel imports by 7 percent to 1.6 billion SME last month, the largest year-to-year percentage decrease in apparel imports since February 2006. The top five suppliers of apparel in January were China, Bangladesh, Vietnam, Honduras and Mexico. China also leads in combined apparel and textile imports, followed by Pakistan, Mexico, India and South Korea.

Julia Hughes, senior vice president of the U.S. Association of Importers of Textiles & Apparel, attributed the decline in total apparel imports to weaker consumer demand associated with a faltering U.S. economy.

The swelling trade deficit with China, which hit $256 billion last year — the apparel and textile trade deficit with China in 2007 was $36.6 billion but narrowed slightly in January to $2.98 billion — has prompted calls on Capitol Hill and by industry groups for a more aggressive stance against the country’s imports. Critics argue that the U.S. needs to impose restraints on China’s import growth, which industry groups and many lawmakers argue is fueled by an undervalued currency and subsidized imports.

Two Senate bills targeting China’s undervalued currency have been tied up in Congress for months, with Democratic leaders holding back on taking action. The U.S. textile industry, which has lost hundreds of thousands of jobs in the last decade as imports surged, has said one of its top priorities this year is to pressure the Bush administration and Congress to extend or replace quotas on 34 categories of apparel and textiles that expire at the end of the year.

This story first appeared in the March 12, 2008 issue of WWD.  Subscribe Today.

“What we have confirmed over the last year is that China gives its apparel industry an enormous array of subsidies,” said Cass Johnson, president of the National Council of Textile Organizations. “We hope the administration will look at that and realize that stronger action is needed against China.”

China agreed to scrap several subsidies last November that were the subject of a U.S. challenge at the World Trade Organization, but Johnson said there are 63 export subsidies that still exist, putting U.S. producers at a competitive disadvantage.

But Vietnam is quickly becoming a big factor in apparel imports as it closes in on Bangladesh for the number two spot for U.S. apparel imports. In the 12 months through Jan. 31, apparel imports from Vietnam advanced to 1.32 billion SME, while imports from Bangladesh were 1.34 billion SME.

Hughes noted that growth would have been even greater if not for a monitoring program the U.S. implemented last year to determine if prices on apparel and textiles were being dumped below fair market value in the U.S., which caused some importers to hold back on placing orders there. But the program is set to expire in early January and the Commerce Department’s first review found insufficient evidence of dumping.

The countries with the biggest apparel and textile year-to-year import declines were Canada, dropping 27.4 percent to 131 million SME, followed by Pakistan with a 17.8 percent decline to 224 million SME, South Korea with a decrease of 18.1 percent to 133 million SME, and Mexico, falling 11.8 percent to 206 million SME.

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