NEW YORK – US apparel brands are switching away from China as a sourcing hub amid fears over US-China tensions. Vietnam and Bangladesh are the likely beneficiaries with China now typically accounting for only 11-30 per cent of companies’ total sourcing value or volume, compared with 30-50 per cent in the past. Despite this, China remains by far the world’s biggest apparel and textile exporter, according to a new US survey.
The United States Fashion Industry Association found that protectionism is the top challenge for the US fashion industry in 2018. For the second year in a row, “protectionist trade policy agenda in the United States,” ranks the top challenge for those surveyed.
The most popular sourcing strategy remains ‘China plus Vietnam plus Many,’ however, more companies plan to further diversify their production in response to the changing business and trade policy environment, especially with regards to China.
“Although China’s position as the top sourcing destination is unshakable, companies are actively seeking alternatives to ‘Made in China’,” says the report. “This does not seem to be due to concerns about cost, but rather the worries about the escalating U.S.-China trade tensions.”
85 percent of respondents said they plan to allocate more resources for sustainability and social compliance in the next two years, in areas including providing training to suppliers and internal employees, adding more employees, and working more closely with third-party certification programmes on sustainability and social compliance.
However, the availability of operational budget remains the primary hurdle for companies that want to do more.
Notably, 100 per cent of respondents map their supply chains – keep records of name, location, and function of suppliers – up from 90 per cent in 2017. Over 80 per cent of respondents track not only Tier 1 suppliers but also Tier 2 suppliers.