WASHINGTON — Bangladesh — on high alert for possible terrorist attacks — posted the largest increase in apparel imports to the U.S. among top 10 suppliers in November, the Commerce Department’s monthly trade report showed Friday.
The third-largest apparel supplier to the U.S., Bangladesh registered a 14.3 percent increase in apparel imports to 133 million square meter equivalents.
Apparel orders for the November shipments were placed months ago in Bangladesh and therefore were not directly impacted by the new terrorist threat that came to light Thursday.
The State Department revealed Thursday that the Islamic State terrorist network issued a threat targeting apparel buyers in Bangladesh in October that could negatively impact garment production and orders in the country this year.
It marked what may be the first time the global fashion industry has been knowingly targeted by terrorists and came as part of a broader warning issued to U.S. citizens of “continuing threats from terrorist groups” in Bangladesh.
Companies have been working in two separate groups to improve safety in apparel factories in Bangladesh in the wake of the Rana Plaza collapse that claimed the lives of 1,133 workers and injured hundreds of others three years ago.
“Until yesterday, we were seeing a very positive trend with growth in Bangladesh,” said Julia Hughes, president at the U.S. Fashion Industry Association. “Even though there had been some concern from the most recent attack [in July], overall companies were very optimistic.”
Bangladesh was hit by a series of terrorist attacks last year, including an attack later claimed by ISIS on a restaurant and café in Dhaka that killed 20 foreign hostages and raised concerns among global brands and retailers.
Hughes said the latest warning from the State Department of a direct threat to fashion buyers in Bangladesh has not turned into a “full-blown crisis,” but companies are beginning to postpone trips.
“There probably are a lot of people who may have changed their trips to Bangladesh today,” she said. “We have to see how it plays out. I don’t think it will necessarily be a long-term problem, barring any actual attacks.”
Nate Herman, senior vice president of supply chain at the American Apparel & Footwear Association, said the disruptions caused by the bankruptcy of South Korean shipping giant Hanjin Shipping Co. at the end of August also likely impacted the data on imports from Asian suppliers.
Brands and retailers saw millions of dollars’ worth of merchandise stranded on ships and at ports in September until the parent company raised money to help ease the crisis and ports started clearing Hanjin containers and ships. He said Bangladesh’s import numbers could have been elevated because goods that were delayed were being cleared through ports.
Herman said the ISIS threat revealed by the State Department remains a major concern, though he had not heard from his members as of early Friday afternoon.
“It is the first time there has ever been a specific threat against garment buyers,” Herman reiterated.
Overall textile and apparel imports to the U.S. from the world rose 7.3 percent to 5.1 billion SME. Apparel imports increased 3.3 percent to 2 billion SME, while textile imports rose 10 percent to 3.1 billion SME.
Another factor behind higher import numbers in November was likely a rush to get holiday goods in, particularly from the Western Hemisphere countries that supply quick-turn items, Herman said.
“I think what you are seeing is people thought holiday looked better than they originally thought so they tried to bring stuff in at the last minute,” Herman said.
But he said the “jury is still out” on Western Hemisphere sourcing this year, particularly since President-elect Donald Trump has vowed to renegotiate the North American Free Trade Agreement with Canada and Mexico.
Vietnam has been the “big winner” in taking share from China, followed by India, Herman said.
“Even though China’s numbers remain flat or slightly up, overall imports are growing and they are losing market share,” Herman said. “Vietnam is the big beneficiary and India has been up almost every month with decent growth.”
Cambodia, on other hand, has continued to struggle in the wake of a rising minimum wage and overall security concerns in the country, he said.
“It has not turned the corner,” Herman said. “If you just look on paper it should be one of the winners from companies moving out of China.”
Among the other top 10 countries, apparel imports from Honduras rose 9 percent, while imports from India increased 8.6 percent and imports from Vietnam were up 8.1 percent.
“The Western Hemisphere is pretty exciting,” Hughes said. “It seems there is more of a shift back to this hemisphere.”
Many goods from the Western Hemisphere fall under the Central American Free Trade Agreement that sees U.S. yarn and fabrics shipped to those countries and then assembled and imported back to the U.S. duty-free.
Among them, apparel imports from the Dominican Republic were up 53 percent in November, while imports from Honduras rose 9 percent and imports from El Salvador increased 6 percent.
Apparel imports from top supplier China were essentially flat in November, while textile imports from China gained 12.6 percent.
Hughes said China has been flat overall although it still has a 40 percent share of the U.S. apparel import market.
The U.S. trade deficit widened to $65.3 billion in November from $61.9 billion in October.