You know that age-old adage “push yourself out of your comfort zone”? Well, the US apparel and footwear sector certainly appears to be leading with this mindset post-Covid, exploring every possible avenue to lower its leverage on China and de-risk supply chains.
In the last week we’ve seen US apparel and footwear sector trade bodies call on the government to renew trade partnerships including The Haitian Hemispheric Opportunity through Partnership Encouragement (HOPE) and the Haiti Economic Lift Program (HELP) Acts as well as the African Growth and Opportunities Act (AGOA), touting their success since the Covid pandemic.
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In 2022, US apparel imports under AGOA surpassed pre-Covid levels in volume and value, while Haiti is believed to have great potential to play a transformative role in the US’ mission to ramp up nearshoring for apparel.
US apparel brands and retailers are clearly looking to exit, or at least reduce their reliance on China when it comes to sourcing. This comes as no surprise, with the nation under continued scrutiny over forced labour concerns – mainly related to the Xinjiang Uyghur Autonomous Region (XUAR).
Last week, Canada’s corporate ethics watchdog announced a probe into NIKE after a coalition of 28 organisations filed a complaint on concerns the sports giant has supply relationships with Chinese firms identified as using or benefitting from Uyghur forced labour.
Of course, Nike insists it has no direct sourcing relationship with any firms operating out of Xinjiang. But industry stakeholders, globally, are becoming increasingly aware of the dangers of hidden supply chains.
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By GlobalDataWhat is clear is that apparel brands and retailers are aware of this and doing everything possible to diversify their sourcing portfolios.
In fact, the latest trade data from the US Office of Textiles and Apparel (OTEXA) reveals in the first five months of 2023, US apparel imports from China fell to a new low of 18.3%. While imports from the five largest Asian suppliers other than China (namely Vietnam, Bangladesh, Indonesia, India, and Cambodia) reached a new high of 44.3%, compared with 37.1% in 2019 before the pandemic.
The shift is happening. The real question is whether and when China will be phased out entirely as a key apparel-sourcing destination. And in the near future will it be a single country that dominates the US apparel sourcing landscape or several?
We’d hope the pandemic has offered some key learning opportunities – in particular not to put all one’s eggs in a single basket – in which case we’d think the latter – diversifying sourcing operations – would win out. Of course, that’s a rather simplistic way of looking at things given there are so many more considerations to be had around price, speed-to-market, and of course in today’s world, social and environmental responsibility.
Either way, we remain at the edge of our seats, eager to see what happens next.
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US apparel sector seeks urgent 10-year renewal of Haiti HOPE
A group of US apparel and retail organisations are pushing for the urgent long-term renewal of the Haitian Hemispheric Opportunity through Partnership Encouragement (HOPE) and the Haiti Economic Lift Program (HELP) Acts to prevent fashion factories and buyers leaving the region.
Calls for AGOA renewal following ‘success’ for US apparel, footwear brands
US apparel and footwear brands and retailers are urging the government to extend the African Growth and Opportunities Act (AGOA).
Gildan Activewear to close Honduras factory to optimise, diversify operations
Canadian apparel maker Gildan Activewear says it is gradually ramping down production of a sewing factory in Honduras as part of wider plans to “balance its apparel sewing production” and confirms the move is in no way related to the murder of four Honduras union leaders last month.
Canada corporate ethics watchdog launches probe into Nike Xinjiang supply links
Canada’s corporate ethics watchdog is launching an investigation into Nike after a coalition of 28 organisations filed a complaint on concerns the sports giant has supply relationships with Chinese firms identified as using or benefitting from Uyghur forced labour.
US retail imports expected to sink in Q3 on supply chain headwinds
The West Coast Ports resolution has brought some relief for retailers but ongoing strikes at Vancouver and Prince Rupert ports in Canada could impact retailers and have a ripple effect on other ports.
Fresh job cuts at PVH under digital, supply chain growth plan
US fashion conglomerate PVH, which owns Calvin Klein and Tommy Hilfiger is making additional job cuts to those announced in 2022 as part of ongoing efforts to invest in digital, supply chain and consumer engagement.
EPR-linked cost increases for UK retail sector could hurt consumer spend
Costly reforms to the packaging levy as part of the incoming Extended Producer Responsibility (EPR) scheme in the EU could thwart retailer efforts to drive down prices and could impact consumer spend, according to the British Retail Consortium.
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