COVID-19 and U.S. Apparel Imports (Updated: May 2020)

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The latest statistics from the Office of Textiles and Apparel (OTEXA) show that the negative impact of COVID-19 on U.S. apparel imports deepened in March 2020. Specifically:

  • The value of U.S. apparel imports sharply decreased by 14.8% in March 2020 from a year ago. Between January and March 2020, the value of U.S. apparel imports decreased by 12.1% year over year, which has been worse than the performance during the 2008-2009 global financial crisis (down 11.8%).
  • As the first country took a hit by COVID-19, China’s apparel exports to the United States continue to deteriorate—its value decreased by as much as 52.4% in March 2020 compared with a year ago (and -43.1% drop year to date in 2020). This result is also worse than the official Chinese statistics, which reported an overall 20.6% drop in China’s apparel exports in the first quarter of 2020.

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  • For the first time in history, Vietnam surpassed China and became the top apparel supplier to the U.S. market in March 2020. Notably, China’s market shares in the U.S. apparel import market dropped to only 11% in March 2020 (and 18.3% year to date in 2020), a new record low in history (was 30% in 2019). However, it should be noted that long before COVID-19, U.S. fashion brands and retailers have begun to reduce their exposure to sourcing from China, especially since October 2019 due to concerns about the US-China tariff war.

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  • China’s lost market shares have been picked up mostly by other Asian suppliers, particularly Vietnam (18.9% YTD in 2020 vs. 16.2% in 2019) and Bangladesh (9.4% YTD in 2020 vs.7.1% in 2019). However, no clear evidence has suggested that U.S. fashion brands and retailers are giving more apparel sourcing orders to suppliers from the Western Hemisphere. In the first three months of 2020, still, only 10.3% of U.S. apparel imports came from CAFTA-DR members (no change from 2019) and 4.4% from NAFTA members (down from 4.5% in 2019).

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  • The unit price of U.S. apparel imports remains relatively stable. The price index (2010=100) in the first three months of 2020 was 103 compared with 104.7 in 2019. However, as a reflection of weak demand, the price index of U.S. apparel imports from China substantially dropped to 72.2 Year to Date in 2020 compared with 83.5 in 2019.

The discussion is closed for this post.

Author: Sheng Lu

Professor @ University of Delaware

22 thoughts on “COVID-19 and U.S. Apparel Imports (Updated: May 2020)”

  1. This is a great article! I think it is especially interesting that Vietnam surpassed China and became the top apparel supplier to the U.S. market in March of this year being that the U.S has relied on them for imports for decades. It is also unfortunate that China was hit with COVID-19 right around when it was already dealing with the concerns of the US-China tariff war. I wonder what is to come for China and the U.S. after these unprecedented times.

    1. I also found it very interesting that Vietnam is establishing itself as a larger stakeholder in the United States’ apparel import market. While Vietnam’s growth potential has been a hot topic of conversation in the apparel sourcing realm, there have also been concerns about its raw materials shortages. If this becomes a prevalent concern for the now go-to U.S. supplier, will orders start to move back to China in light of reportedly lower costs or be placed with other budding countries to continue the diversification trend? The article also mentions that the U.S. has taken little interest in leveraging the Western Hemisphere’s supply chain, with only 10.3% of U.S. apparel imports coming from the CAFTA region and 4.4% from NAFTA members. Because retailers will need to crack down on health codes and sanitation to regain trust from fearful fashion consumers, which is easier to control in near-shored production, I wonder if these numbers will start to spike in the post-pandemic environment.

      1. great comment and thought! I agree totally–while Vietnam is widely known as an emerging sourcing destination & “rising star”, it is still quite astonishing to see it surpassed China and became the No.1 so quickly. I did a study a few years ago about Vietnam and expressed concerns about Vietnam’s limited production capacity to serve as China’s replacement: https://lib.dr.iastate.edu/cgi/viewcontent.cgi?article=3084&context=itaa_proceedings

        While the situation continues to evolve, I think China’s market shares will bounce back later this year, unless the US import demand substantially shrinks.

        I think the trade pattern once again illustrates the resistance of “factory Asia” supported by the flying geese model as we discussed in the class.

        I will leave other students to comment on the western hemisphere

    2. I found it amazing that in these unprecedented times that other economies like Vietnam have been able to grow. I’m just wondering if sourcing from Vietnam will actually continue even after the pandemic is over? Personally, I think that it will. Once companies and countries begin to see the alternative sourcing options from other Asian countries, it may completely deter them from engaging in sourcing operations with China. It’ll be interesting to see what happens once more countries begin to reopen and go back to a new normal. Not only that, but I was interested to see examples of the flying geese model within this article. Specifically, it is evident through the fact that the lost market shares of China are now being picked up by many other Asian suppliers. Like I said, I think this is something that will last far beyond this virus.

  2. With all global countries being affected by COVID-19, I am not surprised to see that there has been a negative impact on U.S. apparel imports. Since the pandemic is very evident in global countries, may factories and manufacturing warehouses have to be closed as well as their operations. It makes sense in order to further contain the virus from getting any worse, especially when it concerns China. China has been one of the first global countries to become really affected by the virus, as well as Italy. Not only that, but it has been hit the hardest as well. In addition, China is also one of the biggest/popular exporters and suppliers to many other countries. I wonder how other countries have been negatively affected by Chinese apparel exports and how it compares to that of the United States? Are they worse or are they better? While I do think that it will further deteriorate China’s economic growth, I do think it affects the flying geese model. It’s a great opportunity for other Asian countries such as Vietnam to grow, allowing them to surpass China and become one of the top apparel exporters. This will allow the Vietnamese (and hopefully other countries) apparel/garment industry much more exposure that will last beyond the end of the virus.

  3. Actually I think it is a great chance for the U.S. to try changing their sourcing pattern. As the States has been sourcing most of their apparel products from China and ignoring some other Asian countries or even European countries. There has been saying that the quality of the products and the prices that China offered is deteriorating so I think this drop of China’s exports to the states can make the U.S. retailers to think of changing their sourcing pattern, trying to source from different countries. This move could be a step forward for the entire T&A industry.

  4. It was really interesting that for the first time ever Vietnam is the top apparel supplier to the United States, surpassing China. It is most likely due to the current circumstance with the global pandemic, but I believe that this was inevitable due to the rising pressures coming from the US-China tariff war. Many fashion brands and retailers were already starting to pull out the sourcing each of these companies had from China due to the new possible policy that could be out into place. It is also relevant that the suppling has been picked up by other suppliers such as Vietnam, CAFTA-DR agreement, Bangladesh, and Mexico. This proves that China does not have to be the sole superpower in sourcing apparel to the United States. COVID-19 is creating a new situation that has new limitations and forces fashion brands and retailers to think outside the box and work with a supply chain that may be unfamiliar to them.

    1. I totally agree. I think eventually sourcing was going to move out of China, but the coronavirus pandemic sped up the process. There was much tension around the China-U.S. tariff war. It’s a very hard process because many companies and countries source from China and to move away and find another country that does the job just as well with cheap prices is hard and different from the norm that has been followed for years now. It’s definitely scary to begin working with unfamiliar, new supply chains, but it could be the start of a relationship between countries.

  5. I was in shock when reading this article. China has been a leading supplier in many industries, especially the T&A Industry. However, recently China has taken significant blows to its manufacturing industry due to the tariff war with the U.S. and now COVID-19. It is unsurprising that Chinese imports have decreased in the United States, but it is shocking to see how they dropped over 50% YOY. Furthermore, it is surprising to see that Vietnam has now surpassed China in apparel imports to the U.S.! China has been a leading importer in the United States T&A Industry, and they have had an extensive lead on its competitors. Now, Vietnam has benefitted from the trade war and COVID-19 as they take the window of opportunity to manufacture apparel goods at cheaper costs and even faster lead times. To see they are now the leaders in the apparel import sector is insane!

  6. I’m surprised about the growth of Vietnam and Bangladesh’s exports to the US. I think it’s a great opportunity for US companies to diversify by sourcing their apparel if they haven’t begun already. It’s also great for other countries that are trying to become leaders in the textile and apparel industry. Now that China is no longer the leading supplier, it gives other countries the opportunity to get ahead. I’m curious to know why Vietnam and Bangladesh’s industries were the ones to do so. Are these two countries effectively responding to the virus that’s giving them the advantage? I’m curious to see what the data shows for the months of April and early May now that some parts of China have reopened!

  7. Kudos to Vietnam for finding success during this unknown and scary time for everyone! We have spoken in FASH455 and other classes about how Vietnam and Bangladesh are working their way up to become top players in the fashion industry and the time has finally come for Vietnam to surpass China. Since this is a result of both the trade war as well as the coronavirus threat, it will be interesting to see if Vietnam will remain at the top ranks post COVID-19. Will the shift to Vietnam encourage more shifts outside of China? Aside from Vietnam’s successes, it is also shocking to me that the unit price of apparel imports is remaining stable. Every retailer every day emails about sales that they are hosting on their website and I have seen record lows on pricing. I am shocked to see that the apparel import pricing is remaining stable and not declining as the state of the fashion industry is unknown and consumer spending is on a decline. I am eager to see how else COVID-19 will continue to impact the fashion industry and look forward to the progress and changes it will invoke.

  8. Under the impacts of COVID-19, there is no surprise that the imports from China have decreased, but the increase in imports from other Asia countries such as Vietnam and Bangladesh has surprised me a lot. China is losing its market share in fashion factories while Vietnam and Bangladesh are taking over China’s market and strengthen its power in fashion industry. From my personal perspective, I think the trend will maintain and steadily grow. As the labor cost in China keeps increasing, and fashion companies want to maintain their cost, they may want to move their factories to other Asia countries that have lower labor wages. So, if China wants to consolidate its power in fashion industry, it may need to provide another benefit to attract fashion companies.

  9. After reading this article, I am not too surprised that imports from China have had a huge decline. It is going to be very interested to see what the United States is going to do about their imports from different industries once the COVID-19 pandemic passes. Now that so many are hesitant to import their goods from China, I wonder if once this all passes, if some will still be hesitant in importing from China. This pandemic has affected so many economies worldwide, so it will be very interesting to see how these countries are going to make changes once everything settles down again.

  10. I was not surprised to see that China is experiencing a decline in but I was surprised to see Vietnam gaining this much success during this time and it will be very interesting to see if they have what it takes to sustain growth after this pandemic ends. In class we have talked about the flying geese model and I feel like this situation with vietnams growth ties into that. There has been many headlines of a “trade war” and tariffs between china and the US that has been highly publicized. Things like this can lead to an opportunity for other asian countries to become a greater power in apparel exports. With lower wages in these countries it may appeal to countries greatly to stay in these other countries like Vietnam to keep their prices the same if not lower in this economy. Time will only tell as countries begin to re-open more and demand for apparel increases again.

  11. This article is extremely interesting because it gives a statistical view of the effect of COVID-19. I think it is interesting to see the sharp decline in U.S. apparel imports from last year, starting in March 2020. I also think it is interesting that other asian countries have been picking up China’s lost market shares. It brings to the surface the question of what will happen after? Will the U.S. begin to source in other Asian countries instead of China? or will they stop sourcing in Asia in general? I will say that I did not expect to see that the apparel import pricing is remaining stable and not declining as consumer spending is declining and the fashion industry is not necessary stable. I am very interested to see how things will change after COVID-19 and how it will change the fashion industry.

  12. This article was very interesting to read, especially now at the current date. Hearing the decline of our market at only March sets low expectations for any textile companies to survive this virus. Being able to physically see the drastic effects is eye-opening, causing me to think about how companies will adapt and provide solutions to this situation. I think the impact of political relationships with other countries are also going to be under pressure for the near future. After studying the Trade War it will be interesting to see if China and the US will remove tariffs or only increase tariffs to protect their own countries economy first.

  13. I found it very interesting to see that Vietnam has surpassed China in becoming the US top apparel supplier. This is incredible to think that a country could top China so quickly in this area especially one that seems very crucial to the fashion industry globally. What I am curious about now is how will Vietnam be able to pick up with the large demands that the US once gave to China when it came to sourcing? And will China be able to reclaim their spot as number 1, how long could it take if that were to happen?

  14. Due to the effects of COVID-19, it is not surprising to read that imports from China have dramatically decreased. It is very interesting to read about other countries surpassing China so quickly, as the U.S. has so heavily relied on China for trade in the past. With this change in supply, there are many questions that come to mind. Who will permanently replace China as the leading supplier to Western countries? As labor costs in China continue to rise, and Western fashion companies continue to struggle, retailers may start to decide to relocate their factories to other Asian countries with low labor costs, such as Bangladesh. This change also poses the question: will pressures of Western companies worsen labor conditions for these impoverished countries?

  15. Given the evidence that Vietnam and Bangladesh have increased their market shares when it comes to US imports, the problem arises involving unfair conditions, and are they spreading? or are they being halted and replaced by robotics and AI?? We’ve read up on some of the issues surrounding Bangladesh and the textile industry, and do you guys believe that the United States is inadvertently encouraging the use of cheap labor and production in the search for China-alternatives? I personally feel like amidst trade wars with China, cheaper labor for many under-the-radar companies must be permitting or stimulating the use of mistreated and underpaid workers in less wealthy countries who need the textile industry to remain afloat. Even the higher pedigree companies were found to be producing garments in these factories, even when they seemingly didn’t know about it and it was under the corrupt control of their suppliers using cheaper factories.

  16. I thought this article was very interesting. I was shocked to read for the first time that Vietnam is successful in beating China to being the top retail supplier to the U.S. due to the COVID-19 outbreak. I am aware that the US was already seeking to source from locations other than China before the Pandemic, but I don’t think they were expecting to turn away from China this suddenly. The sudden change also may have led to China’s export value to drop 52.4% in March 2020 which just shows how severe this pandemic is and how it is severely affecting the fashion industry.

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