Understand the Evolving Production and Trade Patterns of Textiles and Apparel “Made in Asia”: Discussion Questions from Students in FASH455

Students in FASH455 have proposed the following discussion questions based on the videos about the state of textile and apparel in Asia. Everyone is welcome to join the online discussion. For FASH455 students, please address at least two questions and mention the question number (#) in your reply.

#1 We have seen all the improvements and “upgrading” Vietnam has made toward the fashion industry. What can the garment industry in other countries take away from Vietnam’s experiences?

#2 Is Asia’s highly integrated apparel supply chain unique to the region? Can the Western Hemisphere “copy” Asia’s model?

#3 How can Asia’s textile and apparel industry balance the growing demand for sustainability and the need to remain cost-competitive? What innovative strategies can be adopted to achieve this balance?

#4 As Asian textiles and apparel factories continue to improve their efficiency and expand product offers, will it be beneficial for the US to reach a trade agreement with Asian countries? Or do you believe such an agreement might contradict the goals we try to achieve from CAFTA-DR?

#5 Will Vietnam eventually become the next China, or could its labor shortages be a significant barrier preventing its textile and apparel industry from advancing to the next level?

#6 Should textile and garment factories in Asia make more efforts to appeal to the younger generation (e.g., Gen Z)? Or is automation the solution?

#7 To what extent do you think Asian apparel exporting countries (e.g., Bangladesh, Vietnam and Cambodia) will reduce their dependence on textile raw materials supply from China due to the Uyghur Forced Labor Prevention Act (UFLPA)? Or, instead, do you think Asian apparel-exporting countries other than China benefit from UFLPA?

#8 The video shows that Asian countries have begun to invest heavily in new production capacities for textile recycling. Do you believe the region will continue to dominate textile and apparel production in the era of fashion circularity? Or will the emergence of textile recycling shift the world textile and apparel trade patterns in the long run?

FASH455 Exclusive Interview with Beth Hughes, Vice President of the American Apparel and Footwear Association (AAFA), about US apparel sourcing from Central America

About Beth Hughes

Beth Hughes serves as the Vice President of the American Apparel and Footwear Association (AAFA), responsible for supporting the association’s efforts on international trade and customs issues. Beth oversees AAFA’s Trade Policy Committee, as well as AAFA’s Customs Group. Beth is also the spokesperson of the Coalition for Economic Partnership in the Americas (CEPA), a group of prominent American companies, and manufacturers committed to advancing regional trade and employment opportunities in the Western Hemisphere.

Before joining AAFA, Beth served for six years as senior director of international affairs at the International Dairy Foods Association. Beth earned a Bachelor of Arts degree in political science at George Washington University and received a Master of Arts in international affairs from Florida State University.

The interview was conducted by Leah Marsh, a graduate student in the Department of Fashion and Apparel Studies at the University of Delaware. Leah’s research focused on​​ exploring EU retailers’ sourcing strategies for clothing made from recycled textile materials and fashion companies’ supply chain and sourcing strategies.

The interview is part of the 2023 Cotton in the Curriculum program, supported by Cotton Incorporated, to develop open educational resources (OER) for global apparel sourcing classes.

FASH455 Exclusive Interview with Julia Hughes, President of the United States Fashion Industry Association about the Latest US Apparel Sourcing Trends

About Julia K. Hughes

Julia K. Hughes is President of the United States Fashion Industry Association (USFIA), which represents brands, retailers, importers, and wholesalers based in the United States and doing business globally. She represents the industry in front of the U.S. government as well as international governments and stakeholders, explaining how fashion companies create high quality jobs in the United States and economic opportunities around the world.

An expert on textile and apparel trade issues, Julie has testified before Congress and the Executive Branch. She frequently speaks at international conferences including the China & Asia Textile Forum, Fashion Institute of Technology (FIT), Harvard University’s Bangladesh Development Conference, MAGIC, Prime Source Forum, Vietnam Textile Summit, and others.

Julie served as the first President and is one of the founders of the Washington Chapter of Women in International Trade (WIIT) and is one of the founders of the WIIT Charitable Trust. She also was the first President of the Organization of Women in International Trade (OWIT).  In 1992, she received the Outstanding Woman in International Trade award and in 2008, the WIIT Lifetime Achievement Award. She also is a member of the International Women’s Forum.

Julia has an M.A. in International Studies from the Johns Hopkins School of Advanced International Studies and a B.S. in Foreign Service from Georgetown University.

The interview was conducted by Leah Marsh, a graduate student in the Department of Fashion and Apparel Studies at the University of Delaware. Leah’s research focused on​​ exploring EU retailers’ sourcing strategies for clothing made from recycled textile materials and fashion companies’ supply chain and sourcing strategies.

The interview is part of the 2023 Cotton in the Curriculum program, supported by Cotton Incorporated, to develop open educational resources (OER) for global apparel sourcing classes.

Technical Design and Apparel Sourcing: FASH455 Exclusive Interview with Emma Zuckerman (UD & FASH BS16), Technical Designer at Nike

About Emma Zuckerman

Emma Zuckerman, a New Jersey native, graduated from the University of Delaware in 2016 with a degree in Apparel Design. During her time at UD, she actively participated in the FASH program and engaged in extracurricular activities related to her major. Emma conducted research on functional fashion with Dr. Martha Hall and held positions on the executive board, eventually becoming the President of Synergy Fashion Group in her senior year. She also founded a club dedicated to creating adaptive garments for children with disabilities. After graduation, Emma commenced her career in technical design with Under Armour (UA), accumulating six years of experience across various apparel categories and fabrications. She began in youth basketball, then transitioned through a range of products, from underwear to seamless leggings, woven jackets, and pants. In her later years at Under Armour, she played a significant role in the launch of Curry Brand and the introduction of UA’s first inline women’s basketball apparel line (non-uniform). Presently, Emma holds the position of Senior Technical Designer at Nike, where she contributes to the development of ACG and Nike SB product lines.

In her free time, Emma loves working on personal sewing, patterning, and draping projects. She also loves hiking, skateboarding, baking, swimming, and painting!

Disclaimer: The views expressed in this interview are those of Emma Zuckerman and do not reflect the views or positions of her employer or any affiliated organizations.

Sheng: What does a technical designer do? Can you walk us through your typical day as a technical designer? Also, what makes you love your job?

Emma: Technical designers work on developing clothing – we work with factory partners to take a style from a conceptual sketch to bulk production. For each style, we start by working with our design partners to understand their vision. We create detailed construction sketches, measurement charts, and sometimes original patterns, then compile those into a tech pack along with our designer’s garment sketch and a Bill of Materials outlining all garment components. A factory partner uses the information in that tech pack to make a sample to send back to us. We fit that sample with our team, cutting and pinning until we achieve the desired fit and aesthetic. The factory uses our feedback to create a second sample, and this process repeats until the style is finalized and approved for production. Throughout the process, we keep the tech pack up-to-date and ensure it accurately reflects the style we’re developing.

There are so many things I love about my job! The subjects of fitting and patterning are fascinating to me, and there will always be so much to learn about them. I love that throughout my career, there will be no limit to how much I can learn and how much my skills can grow. I exercise my creativity while also exercising the mathematical side of my brain, so my job is constantly challenging me in really interesting ways. I get to work with people around the world, learn about other cultures, backgrounds, and communication styles, and collaborate with amazingly talented teammates.

Sheng: How does a technical designer get involved in a fashion company’s sourcing process?

Emma: A technical designer’s level of involvement in the sourcing process varies from company to company, but it is always extremely helpful to work closely with our sourcing team. Since both technical designers and the sourcing team communicate with factories, we often check in with each other to make sure the information we’re sending is consistent. We (technical designers) can help provide feedback on factory capabilities and sample quality. Understanding the sourcing process helps us gain insight into why our sourcing partners allocate certain styles to specific factories (for example, a factory might have expertise with woven fabrics, outerwear, or embroidery; a style might qualify for a lower duty rate if sourced from a specific region; some factories may reach their maximum capacity for new styles more quickly than others).

Technical designers work most closely with our sourcing partners during costing conversations. Factories send cost sheets for every style at several key points during development. These cost sheets break down every element that contributes to the final cost of making the garment, from materials to trims, to time spent.  One major role of a sourcing partner (or, at some companies, a product developer) is to process these cost sheets and advise the rest of the team on how much cost needs to be saved, and/or what steps can be taken to save cost, to ensure the style is profitable. Technical designers can use our garment construction and patterning expertise to effectively contribute to these conversations (which leads nicely into the next question)!

Sheng: We know production cost is a critical sourcing factor for fashion brands and retailers. From a technical designer’s perspective, what factors affect garment production and its sourcing costs? What strategies can be employed to manage these costs, beyond labor wages?

Emma: So many factors affect production cost – at the top of my mind are material cost (for fabric yardage and individual trims like zippers) and cut/make time (which includes labor cost and factory overhead). Material usage and cut/make time are both factors that technical designers can heavily influence during costing conversations with our design and sourcing teams. 

Material usage: Marker efficiency refers to the amount of fabric used per garment compared to the amount wasted. The more closely pattern pieces can fit together, the less space for fabric scraps between them and the more efficient a marker will be. A technical designer can use their patterning experience to advise pattern shapes that will contribute to marker efficiency. For example, adding or removing a seam may allow pattern pieces to fit more closely together. Choosing where and when to engineer print placements – for example, matching stripes across a seam – will also impact the way pattern pieces can be arranged and, therefore, how efficient a marker can be. An efficient marker will both save cost and minimize fabric waste.

More on material usage, and cut/make time: Each construction choice contributes to the final cost of making the garment. For example, when it comes to finishing seam allowances, binding a seam allowance will take longer and use more material than an overlock stitch. For that reason, binding a seam allowance will also be more expensive. As garment construction experts, we lead conversations about style details, the time it will take to construct them, and other options that could potentially save time and material. This helps our team make informed choices that consider both cost and aesthetics.

Sheng: What are your thoughts on the trend of fashion companies using more sustainable materials like recycled cotton in their products?

Emma: I support fashion companies making an effort toward more sustainable & ethical production, and using recycled materials is an important step. Fabric with recycled fiber content can be more expensive and more difficult to source than traditional fabric, which may discourage some companies from moving in that direction. I’m hopeful that this trend will continue and that as it gains popularity, fabric with recycled fiber content will become easier to source over time.

Speaking of ethical production, I also would like to see fashion industry brands take additional steps toward a more earth-positive and people-positive existence, including:

  • Considering local labor laws, worker wages, and working conditions when selecting factories
  • Implementing garment repair programs to extend the lifecycle of their styles
  • Improving accuracy of demand planning to reduce excess inventory and/or considering donation or upcycling of excess inventory
  • Expanding size ranges and accurately grading sizes to fit well on plus-sized consumers
  • Moving away from gendering clothing as “men’s” or “women’s;” during sample development, checking that samples fit well on lots of body types (including individuals who have had gender-affirming care, individuals who haven’t, individuals who may be wearing gender affirming garments like binders)
  • Diversifying the company workforce at every level, from entry-level to leadership to c-suite
  • Expanding representation in advertising campaigns to reflect the diversity of global consumers
  • Supporting nonprofit agencies whose work aligns with company values

Some companies are doing a great job of fulfilling some, most, or all of the items on my above wish list, but we know that the fashion industry has a long way to go when it comes to impacting our earth and our societies positively. I think it’s our job as newer fashion industry professionals to speak up about all of this and start to push our industry in a better direction.

Sheng: What other key industry trends will you closely monitor in 2023?

Emma: I am so interested in the increased use of 2D and 3D patterning software. Programs such as Gerber, Optitex, Clo, and Browzwear are already changing the design and development process in fascinating ways. Experience in any of these programs has already become a very valuable asset for job applicants. I’m curious whether garments will ever be sold to consumers based only on 3D renderings, and if body scanning will become a more mainstream part of the shopping process.

I’m also curious how the increased use of 2D and 3D patterning software will impact more traditional design processes, like paper patterns and draping. Will these arts be preserved? Are there types of apparel that will always need to be draped or patterned physically? Will students 20 years from now still learn to pattern and drape the way we did, or will these skills be fully computer-based?

Sheng: Any reflections on your experiences at UD and FASH? what advice would you offer current students preparing for a career in fashion after graduation?

Emma: I feel so lucky to have had the experience that I did at UD and within the FASH program. I learned so much in my patterning, draping, collections, textiles, and sourcing classes (big shoutout to Dr. Lu!) that has stayed with me and helped me find success in my current job.

I have so much advice! If you’re looking for a career in technical design, practice any patterning software you can access as much as you can. As you begin applying to jobs, try to reach out to contacts at the companies you’re applying to (even if it means sending a random LinkedIn message to a fellow UD grad, or asking a professor/another student to help connect you with someone). Start your career with curiosity and an open mind – you will learn so much on the job that isn’t covered in school. Try to find a mentor, or several mentors, who’ve had work experiences similar to yours. A mentor who you can trust and rely on for advice makes a huge difference when work gets challenging. Speaking of which – work does get challenging, and that’s okay! Work on learning to identify situations that you can work through and learn from (which are hugely beneficial to your personal growth and career development), compared to work environments that are more consistently unhealthy or not providing what you need (which are an indication that it’s time to make a change). If you have coworkers you trust, sharing salary information openly is a great way to make sure everyone’s skills and contributions are being valued appropriately.

Enjoy your time in college and in the FASH program. I miss it!

–The END–

What Does Sustainable Apparel Sourcing Mean for Generation Z?

Many brands and retailers are trying to make their apparel sourcing more sustainable, from publishing the ESG report to using more recycled textile materials in the products. However, the effectiveness of fashion companies’ sustainability efforts and related communication remain largely unknown, especially among Generation Z, their most important target market.

Students in FASH455 and FASH graduate students recently shared their valuable perspectives on sustainable apparel sourcing with Just-Style, a leading publication focusing on the fashion industry. Below are selected original comments from students:

What “sustainable apparel sourcing” means to you and your generation, Generation Z?

Cecilia Goetz, Fashion Merchandising and Management Major (Honors), Senior

To me, sustainable apparel sourcing means going about sourcing in an ethical way both environmentally and socially and often putting the financial interests of the company on the backburner in order to do so. This can mean a number of things, including a shift towards more local production (nearshoring), the implementation of labor regulations in factories, and the use of more eco-friendly materials. On top of this, it is a matter of companies being entirely transparent with their efforts and being open with consumers about where their products came from and how they were made. Part of sustainability involves doing everything in a company’s power to support people and the environment, and the other part involves telling consumers the entire truth, whether it works in their favor or not. I think a large portion of Generation Z has a strong understanding of “sustainable apparel sourcing,” but there are still so many young consumers who are never faced with the question of how to define it and how to achieve it. My generation is definitely one that is more progressive and well-informed regarding social issues than the Baby Boomers, for example, but there is definitely still a long way to go in terms of educating Gen Z on sustainable practices within the apparel industry.

Emilie Delaye, Entrepreneurship Major, Fashion Management Minor, Senior

It is difficult to share exactly what “sustainable apparel sourcing” means to me and my generation, as I feel the meaning and interpretation of the word “sustainable” itself is changing and expanding rapidly. A few years ago, probably 5-10 years ago, the phrase sustainable apparel sourcing referred to sustainable efforts in terms of the environment. This meant that products were perceived as sustainably sourced when they met some of the following characteristics, including: using inputs that are biodegradable components from natural or recycled fibers, inputs that have no chemical treatment use, or inputs that were produced with the effort to reduce overall carbon footprint. I think now, my generation is viewing “sustainable sourcing” as a phenomenon that is much larger than environmental issues. There are many more intricate issues that intertwine with sustainable sourcing that go beyond purely environmental focuses, including social and ethical factors. Gen Z consumers, including myself, are becoming more concerned with the “who” and “where” questions in sourcing. This means that consumers view sustainable sourcing as things such as sourcing from responsible production facilities that pay fair wages or avoiding sourcing in areas with large social or ethical issues.

Hannah Laurits, Graduate Student, Fashion and Apparel Studies

For Generation Z, the concept of “sustainable apparel sourcing” embodies a commitment to ethical, eco-conscious, traceable, and transparent sourcing practices. Sustainability encompasses various elements that define responsible production. It depends upon the ability to trace the origins and production methods of products, emphasizing fair labor practices across all tiers of the supply chain. Our generation greatly emphasizes environmental preservation and recognizes the importance of protecting our earth’s natural resources for future generations.

A sustainable supply chain operates with a determination to minimize adverse environmental impacts by harnessing emerging innovations in materials and processes. To Generation Z, a product can earn a sustainable label or association by meeting a portion of these criteria. Realistically, we understand that perfection in sustainability remains nearly impossible to achieve today. Nevertheless, as a generation, we actively seek products that align with as many of these sustainability parameters as possible and validate their claims with reliable evidence. To Generation Z, sustainable sourcing is about driving positive change in the fashion industry through our apparel supply chain.

Miranda Rack, Fashion Merchandising and Management Major (Honors) & FASH 4+1 Program Graduate Student

Sustainable apparel sourcing means knowing where textiles and apparel come from and who made it. Consumers are starting to consider this information when buying clothing. The country-of-origin label does not provide enough information to learn anything about the garment. Especially because the country-of-origin tag only displays where the garment was finished, consumers receive no information on where the fibers or fabric was sourced. While it is common for brands to share their tier 1 suppliers, consumers want more information than that. We want to know which factories produced what, and especially who made our clothing. If a brand wants to source apparel more sustainably, the first step is to become more transparent. Brands should be required to publicize all steps of their supply chain. Consumers value supply chain transparency because it builds a sense of trust between brand and consumer. It is the brand’s responsibility to be open and honest about where their products come from, not the consumer’s job to research every time they shop.

Kendall Ludwig, Fashion Merchandising and Management Major & FASH 4+1 Program Graduate Student

It means full responsibility for their supply chain. From start to finish, a company knows who makes their products and ensures that the garment workers they employ have access to basic human rights such as a living wage and the right to unionize. On top of this, the company should ensure that the health and safety of their workers are not at risk. If human rights abuses appear in their supply chain, the company must remediate them. From an environmental perspective, sustainable apparel sourcing also means that a company has implemented a plethora of strategies to minimize the harmful environmental impacts their business creates. Further, social and environmentally sustainable apparel sourcing requires transparency from apparel companies. If a company does not disclose their efforts, it is valid to assume they have none. The more transparent, the better!

Leah Marsh, Graduate Student (4+1 program), Fashion and Apparel Studies

Gen Z has become increasingly aware of the global fashion industry’s harmful effects on the environment. With this, a majority of us have turned towards the topic of sustainability in order to purchase clothing and support companies that cause minimal harm. Our understanding of “sustainable apparel sourcing” includes both environmental and social topics. We believe that companies who sustainably source their apparel products are paying their workers fair wages and, protecting their health and safety, and also respecting their local environments by minimizing their output of pollutants and being mindful of limited resources. These are just a couple of specific examples, but we also care about topics such as economic circularity, local production, and consumer education. Ultimately, to Gen Z, sustainable apparel sourcing means not only producing clothing with minimal negative environmental and social impacts but also being transparent and responsible throughout the entirety of the supply chain. Gen Z consumers are continuously looking for fashion brands and companies to support that align with these values. It is important to me and my generation to support those who make genuine efforts to create a more sustainable and ethical fashion and apparel industry.

Annabelle Brame, Fashion Design & Product Innovation Major, Senior

When asked how we Gen Z interprets “sustainable apparel sourcing” the first thing that comes to mind is sustainability for workers. I think it is so easy to confuse sustainability with environmental consciousness. And while that is a piece of it, the ethical element is wildly important. Since most companies outsource production from other countries with more labor, we are very conscious of how that looks for the workers. We see employees not being fairly paid with poor working conditions, which is not only sickening but wildly unsustainable. And while there is so much talk about the poor conditions, that is how we encourage the shift to more sustainable practices. Sustainability in apparel sourcing starts to look at fair wages, manageable hours, and safe working conditions. This isn’t a one-person job. It takes companies, the government, and factory owners to make that change physically.

Hunter Wills, Entrepreneurship Major, Fashion Management Minor, Senior

Sustainable apparel sourcing means that you know exactly where a garment is coming from, you are able to easily learn about the supply chain if you would like to do further research, and you know everyone in the process is being treated ethically. When brands try to hide information about their supply chain, it usually means they are not practicing sustainable sourcing, whereas companies that are very open and transparent about this process are more likely to be sustainable.

How does a fashion company’s sustainability in apparel sourcing affect your purchasing decisions?

Cecilia Goetz, Fashion Merchandising and Management (Honors), Senior

I am embarrassed to admit that in high school, I shopped at brands like Shein and Forever 21 before taking any classes, especially about fashion and sustainability. As a teenager with little money of my own and virtually no knowledge of what goes on behind the scenes before a garment arrives at your doorstep, the low prices and trendiness of clothing was my main priority. Unfortunately, I think that is the case for a lot of young consumers, which is why brands like Shein perform so well. Now, after years of specially curated classes about the fashion industry, I have learned about the Rana Plaza Collapse of 2013, the chemicals and water used in the production of a single t-shirt, the wages for garment workers in less developed countries, and so much more. As a result, the sustainability of a brand is something I really look into when shopping. Whether it be the hang tags on a garment calling out recycled materials, an online tab about sustainability initiatives, or a hanger made from eco-friendly materials, I am always more inclined to make a purchase from a brand when I see these things. I do, however, also try to weary of vague references to ethical or environmentally sound practices because not all companies tell the whole truth when advertising the sustainable aspects of their products.

Emilie Delaye, Entrepreneurship Major, Fashion Management Minor, Senior

I think that a fashion company’s sustainability in apparel sourcing does affect my purchasing decisions, however, I believe that I am more informed than the typical Gen Z consumer. Though it is becoming increasingly popular for consumers to be educated on the processes, such as sourcing processes, that go into their apparel production, I do not believe we are at a point where the average consumer understands or has the background knowledge to know what the implications of brand’s sourcing decisions have. By studying the fashion industry in school, I have had access to this knowledge, and therefore have changed my shopping behavior. I tend to lean more towards thrifting clothing, as most sustainable brands that seem compelling fall sadly out of the price range of a college student’s tight budget. For me, thrifting from local consignment stores is a way for me to “boycott” the larger fast fashion brands and choose a relatively lesser evil.

Hannah Laurits, Graduate Student, Fashion and Apparel Studies

A company’s reputation and commitment to sustainable sourcing practices significantly influences my purchasing decisions. When I shop, I try to practice conscientious consumption, taking into account that company’s reputation and what the impact of that article of clothing may be. Being well-informed about the practices of the brands I support is crucial to me, as I feel it is my responsibility to ensure I am buying from a company that is dedicated to maintaining a sustainable supply chain. When I am unsure, I tend to do more research into the brand to see how transparent they are about their practices. When purchasing a clothing item, I strategically look for brands that are doing their part in this industry’s efforts to improve their environmental and social impacts. While I don’t expect absolute perfection in a company’s sustainability practices, I remain vigilant for warning signs, such as greenwashing or a lack of information, that may raise doubts about their authenticity.

Miranda Rack, Fashion Merchandising and Management Major (Honors) & FASH 4+1 Program Graduate Student

As a student studying sustainable fashion, a company’s sourcing habits greatly affect my purchase intention. I buy most clothing secondhand because I do not trust many popular retailers to put sustainability over profit. I will not shop from them if I cannot verify that a brand’s sourcing strategies do not harm people or the planet. Because so many brands are not transparent enough, it is nearly impossible to verify that their sourcing practices do less harm than good. For example, I will not buy from Shein because I cannot verify that their products are made without forced labor. Shein, among many other Chinese fast fashion retailers, takes advantage of de minimis policies, which allow many product shipments to sneak through customs. There is a possibility that Shein sources cotton from the Xinjiang region of China, so I do not shop there.

Kendall Ludwig, Fashion Merchandising and Management Major & FASH 4+1 Program Graduate Student

A fashion company’s sourcing sustainability efforts are a huge determinant of whether or not I will buy from them. This is one of the main reasons why I predominantly shop secondhand. Not enough brands live up to my expectations when it comes to supply chain transparency. It is hard for me to buy a new product when I am unsure of where it has been through every stage of its development. Although this is also the case when I buy secondhand clothing as well, I know that I am not directly giving my money to a brand that may be exploiting workers or causing detrimental harm to the environment.

Leah Marsh, Graduate Student (4+1 program), Fashion and Apparel Studies

As a Gen Z consumer who prioritizes ethical and sustainable fashion, there are a handful of different ways that a company’s sustainability in apparel sourcing affects my purchasing decisions. To begin, I believe that research and transparency is the first step I take in order to understand whether or not I should support a specific brand. It is really important to me for a company’s website, or an article of clothing’s tag to disclose as much information as possible. Key information that stands out to me as a conscious consumer is the country of origin, price, fiber content, and even the care instructions.

With this, if I notice that a company sources its materials from a hazardous region or the original retail price is astronomically low, I definitely think twice about purchasing their products. The biggest dividing factor amongst Gen Z consumers is the fact that some see these extremely low prices and follow through with the purchase due to its economic appeal. On the other hand, some see these prices and immediately question how a product could be produced at such a low price, and refrain from supporting the company.

Annabelle Brame, Fashion Design & Product Innovation Major, Senior

Personally, it holds a great deal on how I purchase. While I am a college student I recognize the dramatic harms of shopping fast fashion, which uses a vast range of unsustainable sourcing practices. That leads me not to want to purchase from brands such as Shein, no matter the cost. However, it is important to recognize my background and education. As a fashion student, I have learned so much about what goes on behind the curtain that the masses don’t. I think it is important to remind ourselves when interacting with other individuals shopping at these places, that they are only seeing the surface level of this information, and while we can’t cause them to fully understand it in one conversation, we have to remember creating resources and alternatives that demonstrate sustainable sourcing is what can help make that difference.

Also we have to consider the trade-off. Can we stop purchasing from companies who aren’t making changes in how they source? Not always. So, we have to think critically about how we consume and show ourselves grace as we work towards a more sustainable future. Is it possible to quit shopping at brands that do not pay their workers a living wage cold-turkey?

Honestly, probably not. Many of our brands are not transparent or know fully what is happening where they are producing so it is extremely difficult as consumers to buy into the right places correctly. Also, the key is moderation, just like going on a diet. If you give up all sweets, it makes it more likely you will quit the diet altogether. But what will lead to your success is learning how to consume it in a healthy moderation. For example, instead of spending hundreds of dollars on hauls of clothing, consume less. A purchase every now and again is nothing to feel guilty of. It is all about moderation. The ways these unsustainable companies make their money is from the mass amounts of consumption. By consuming less, it significantly begins to help the problem. That is what I think scares Gen Z so much, the idea that it is an all-or-nothing trade when purchasing.

Hunter Wills, Entrepreneurship Major, Fashion Management Minor, Senior

A company’s sustainability in apparel sourcing is the main driver in my purchasing decisions. This makes it very hard for me to justify buying anything new because there are very few brands that are making clothing with sustainable sourcing in mind and are offered at a price point that I can afford. This usually causes me to look online or thrift stores for second-hand clothing that I know will last.

Are there specific sustainable materials or practices in apparel sourcing that particularly interest you and your peers? Why do you find them appealing or important?

Cecilia Goetz, Fashion Merchandising and Management Major (Honors), Senior

The act of recycling fabrics to create new textiles or upcycling old garments into exciting and fashionable pieces is a practice that definitely resonates with several members of Generation Z, including my peers and me. Overproduction and overconsumption are two very large issues in the apparel industry that have an extremely negative effect on the environment…Upcycling, in particular, is something that Gen Z has taken a liking to. My Tik Tok “for you page” is often filled with crafty teenagers turning a worn down pair of pants from Goodwill that they would never wear into a stylish two-piece set that can be worn in multiple ways. Not only did they spend little money, but they also got the opportunity to show off their creativity and design skills on an app that could allow them to go viral at any moment. In posting these videos, they are helping their personal brands while showing their viewers how they can be sustainable and upcycle clothing themselves.

Emilie Delaye, Entrepreneurship Major, Fashion Management Minor, Senior

The biggest sustainable materials and practices that come to mind would probably be associated with the key terms “organic cotton” and “fair labor”. In terms of sustainable materials, organic cotton has become one that is very popular in Gen Z, and one that brands have quickly picked up on and highlighted in their practices. The other term that I believe highlights some of the most popular practices when it comes to sustainable sourcing is fair labor. This practice I believe is still particularly prevalent in the more “woke” crowds of consumers, however has begun to penetrate mainstream discussion. I believe that Gen Z consumers want to be able to consume clothing, knowing that the production and sourcing was not associated with child or slave labor. Brands have also tended to emphasize this practice for their consumers. Whether their statements are an accurate representation of their sourcing has yet to be seen.

Hannah Laurits, Graduate Student, Fashion and Apparel Studies

Absolutely! Specific materials are very appealing to both myself and my peers. Any time I come across an article of clothing, one of the first things I do is to inspect the inside tags to determine its place of origin and the fiber composition of the fabric. Investigating a product’s origins provides valuable insights into that garment’s potential economic and social impact.

What excites me the most are sustainable fibers, especially new innovations which are more environmentally friendly. When looking at fabrics, I watch for green flags such as organic fibers, hemp, linen, bamboo, and more. Many of my peers are interested in recycled fibers, such as recycled cotton. These fibers are enticing to my peers and I as they are much less harmful to the environment compared to other alternatives.

Miranda Rack, Fashion Merchandising and Management Major (Honors) & FASH 4+1 Program Graduate Student

Sustainable apparel sourcing does not just include supply chain transparency but also the environmental impact of sourcing decisions. Brands often set benchmarks to reduce carbon or water emissions, use more recycled textiles, source only organic materials like cotton, or no longer use animal fur. All these issues are equally important in sustainability, but consumers will prioritize issues that personally interest them when shopping. Personally, I am most passionate about overconsumption and post-consumer textile waste. So, I am more likely to shop at secondhand stores than slow fashion retailers.

Kendall Ludwig, Fashion Merchandising and Management Major & FASH 4+1 Program Graduate Student

I think organic cotton has become quite popular recently with our peers. In the Sustainable Fashion Club (note: a student organization at the University of Delaware), the most popular activity by far is painting organic cotton tote bags. Our members love receiving a product that was made with sustainability in mind. While there are unsustainable elements to organic cotton, it seems to be what our Gen Z peers are most drawn to when trying to consume with intention. I think this is still a step in the right direction because consumers are becoming more informed about sustainability in fashion if they are drawn to organic materials. As their knowledge increases, so will responsible purchasing decisions.

Leah Marsh, Graduate Student (4+1 program), Fashion and Apparel Studies

I believe that the sustainable practice in apparel sourcing that resonates with me the most is ethical labor. The topic of fair treatment and fair wages for workers in the fashion industry is what first got me interested in sustainability as a whole. It is extremely important to ensure that all workers are paid fairly, provided safe working conditions, and have basic labor rights protected. There are a handful of accounts and campaigns on social media that introduced me to this important issue. I follow Labour Behind the Label and Fashion Revolution which are two of the non-profit organizations that advocate for a more ethical and sustainable supply chain. Moreover, two of the most prominent social media campaigns are the #PayUp movement and the #WhoMadeMyClothes movement.

Annabelle Brame, Fashion Design & Product Innovation Major, Senior

As a designer, I have really gravitated to fabrics that are not blends. That allows for fabric to be easily recycled after the product’s life, unlike blended fabrics. Secondly, brands sourcing from the U.S. because I feel confident in our enforcement of labor laws. Being able to have the transparency from just trusting the government policies is comforting and inspires me to want to support businesses that run their brands like that. As other countries begin to make changes in their laws, it opens my mind to implementing sustainable sourcing internationally.

Also transparency. I would rather have a company tell me they pay their worker $68 a month than tell me nothing at all or try to make themselves look better than they are. Having that information allows me to evaluate in my brain, if this is ethically right for me. In doing so, it allows consumers to encourage change.

Hunter Wills, Entrepreneurship Major, Fashion Management Minor, Senior

One sustainable practice that I resonate strongly with is upcycling. Upcycling is taking pre-existing clothing and using it to make new garments. I currently do this with my clothing brand named Funky Rat, where we take older pieces of clothing and add our own designs via embroidery and screen printing to them and then sell them. We could have started the brand by having a completely custom hoodie manufactured for us, but we felt there was no need to have this new garment made when we can find perfectly good quality hoodies at local thrift stores and design on top of these. This also allows us to have a unique selection of products and colors, as opposed to having 50 of the same exact thing.

Another practice that resonates strongly with me and my peers is zero waste design. Last semester I found this concept for the first time and was immediately intrigued. I ended up making a hoodie shortly after using a zero waste pattern from the designers Shelly Xu and Katla. It was incredible to me to see something so simple in terms of a pattern fit so well, while creating no waste. I am currently working with a friend on a few zero waste patterns and design concepts, and I cannot wait to see where this concept moves in the future, especially at scale.

How effectively do fashion companies communicate their sustainability efforts to Generation Z like yourself? Are you concerned about the issue of ‘greenwashing’?”

Cecilia Goetz, Fashion Merchandising and Management Major (Honors), Senior

There is definitely some “greenwashing” and performative language used by fashion companies. Some brands struggle to include every detail of the processes that go into the manufacturing of their products. Although they are rarely lying, they often word things in a way that makes them sound better than they are while excluding important information. Some companies are known for their recent shift towards more sustainable practices and transparency. However, they still fail to include exact information about their factory set-ups and are often called out for their lack of true transparency. Moving towards sustainability in the apparel industry has become a major trend in recent years and I think brands are more-so trying to appease consumers and maintain a certain image of integrity, rather than make genuine changes in their mindsets and overall brand ideals.

The main issue behind greenwashing– besides the fact that it is somewhat unethical and sly– is that it works. Because so many customers are unaware of the lack of social responsibility and environmental practices within apparel production, they have no reason to believe that a brand might be withholding some of the truth on the tag of a garment or the product description online. They instead are excited by the thought of a “sustainable” piece of clothing and are often more inclined to actually follow through with the purchase. I will, however, give Generation Z some credit. I think my age group definitely cares more about sustainability than older generations and would be more likely to notice cases of greenwashing than other consumers.

Emilie Delaye, Entrepreneurship Major, Fashion Management Minor, Senior

I think that greenwashing is a major issue in the industry today. Brands have become more astute and turned into what consumers, such as Gen Z consumers, want and, therefore, have amplified their messages on sustainability and ethical business practices extensively. If you look at even major fast fashion brands, such as Shein, it can be seen that the term “sustainable” is thrown around quite frequently, with very little information to back up the statements. I do think as I have said, however, we are not at the point yet where the majority of Gen Z consumers question the words of the brands they are buying from. If a consumer sees that a brand has a section on its website that is dedicated to sustainability, they are very likely to believe that this brand is infact, sustainable.

Hannah Laurits, Graduate Student, Fashion and Apparel Studies

Honestly, it’s really hard right now for fashion companies to communicate their sustainability efforts to Generation Z, this is because sustainability is such a hot topic. Virtually every brand strives to align itself or its products with sustainability, even when its practices do not genuinely reflect these values. Greenwashing is a deceptive marketing tactic and is a large concern for my generation. As consumers and future industry professionals, we are very much aware and mindful of greenwashing practices.

In the retail setting, when I encounter multiple tags flaunting recycled symbols, excessive claims of environmental friendliness, or any other indications of greenwashing, I am immediately deterred. The best thing that a company can do to communicate sustainability efforts to Generation Z is to do so in a subtle yet thoughtful and thorough way. For example, I look for companies that have a dedicated page on their website that goes in depth about their sustainability efforts and future goals. Levi’s is a great example of a brand that does this well.

Brands that genuinely pride themselves on being sustainable and prioritize sustainable practices, should convey their efforts without resorting to overt marketing tactics which may resemble greenwashing. Instead, they should lead with authenticity and transparency, fostering Generation Z’s trust and loyalty as consumers committed to sustainable lifestyles.

Miranda Rack, Fashion Merchandising and Management Major (Honors) & FASH 4+1 Program Graduate Student

Fast fashion companies do a horrible job communicating their sustainability efforts to Generation Z.  The “sustainability” tab is always super small, all the way at the bottom of the home page. Fast fashion retailers are not forthcoming about sustainability initiatives because there is almost always nothing to brag about. I am very concerned about greenwashing because it is just another way for brands to take advantage of consumers. Most consumers do not study sustainable fashion, so when they read “made with 80% recycled fibers,” they believe it is true without verifying. Most brands do not outright lie about their sustainability efforts, but they do hide how their products and practices are killing the planet. Overconsumption is an enormous issue that is hidden from the public because so much post-consumer textile waste is shipped overseas to developing countries. Countries like Ghana and Chile are drowning in our old clothing, but Shein shoppers know nothing about this issue because it is not communicated to consumers. 

Kendall Ludwig, Fashion Merchandising and Management Major & FASH 4+1 Program Graduate Student

Greenwashing is a huge concern as sustainability continues to be identified as a “trend” that brands need to keep up with. Sustainability is not a trend. As a fashion student focusing on sustainability, it is easy for me to identify greenwashing tactics, especially on a brand’s website. But for consumers unfamiliar with greenwashing and sustainability efforts, they may see a sustainability page on a brand’s website and think the brand is doing their part.

Leah Marsh, Graduate Student (4+1 program), Fashion and Apparel Studies

Since sustainability and ethical fashion have become such a hot topic within the industry, I believe that fashion companies have been extremely successful in communicating their sustainability efforts to Gen Z. Companies are aware that this is currently the top priority for my generation, and they are definitely marketing towards it. For example, fashion brands such as H&M have not only increased the information they provide on individual products, but they have also added an entirely new tab to their website dedicated to sustainability. The new tab allows customers to explore the company’s work and commitment to sustainability. However, this has also raised the concern of “greenwashing.” Greenwashing is when a company claims to be doing something to improve their effect on the environment, but there is no proof of change or improvements. Consumers wonder how companies like H&M can prioritize sustainability when, at the same time, they are still a global fast fashion company that produces a plethora of products at relatively low prices.

Annabelle Brame, Fashion Design & Product Innovation Major, Senior

Quite honestly, extremely poorly. Off the top of my head, I can think of maybe two larger brands that I feel do an adequate job at showing their customers their efforts, which is so heartbreaking. I see the issues with greenwashing everywhere I go. Unfortunately, I don’t even believe it is fully the company’s fault. They themself are just uneducated on the topic. We do not have enough professionals to guide a change and effectively communicate “sustainability”; instead, we have incredible marketers who know how to influence consumers. As Gen Z wants to shop sustainably, we often settle for what we see, because we want to believe change is being made.

Especially with the idea that sustainability has to be expensive when we see a supposed “eco-conscious” shirt with sustainable materials for a good price, we don’t look into it. For example, organic cotton has so many benefits compared to standard cotton. But many people fail to realize there is just as much, if not more water waste in its creation. And just because that shirt was made with a so-called “better” cotton doesn’t mean workers were fairly treated or the textile mills had negative CO2 emissions. There is so much we don’t look into, partially from lack of time, but also the idea that we can’t fathom being lied to. These companies know that stamping an eco-friendly sticker on the tag does inspire customers, and they take advantage of that.

Hunter Wills, Entrepreneurship Major, Fashion Management Minor, Senior

I feel that fashion brands do not do a good job of communicating their sustainability efforts to Gen Z. As hard as they try to tell us what they are doing for sustainability, our generation is able to see right through the half hearted efforts and made up terms to fool consumers into thinking they are being sustainable. I feel that this is part of the reason for the resurgence of thrifting, especially with Gen Z. Our generation is tired of being lied to and decided to take that into our own hands with where we buy our clothes from. Thesad truth is that a majority of Gen Z does not know about the impacts of fast fashion and how much of an impact the fashion industry has on the environment. I feel that this is the case because of greenwashing. Brands want consumers to feel that they are helping, not hurting the world with their purchase and will go to great lengths to put on this facade.

As individuals studying fashion merchandising and design and representing the fashion industry’s future professionals, what role do you think your generation can play in advancing sustainability within the industry’s supply chain and sourcing practices?

Cecilia Goetz, Fashion Merchandising and Management Major (Honors), Senior

As Generation Z is slowly approaching the title of the “largest consumer group in America,” it is clear that we can play a major role in changing the trajectory of sustainability in the apparel industry. Gen Z’s strong social media presence gives us a type of influence that generations in the past didn’t have. This communication and activism on a worldwide scale allows the group to reach so many different people and create a call-to-action. There are lots of Instagram and Tik Tok accounts like @genzforchange or @environment who aim to educate their followers on current issues and events related to sustainability, social responsibility, and more. With over a million followers collectively, the two accounts can teach young consumers about their impact and how they can change their shopping habits. Adjusting their mindsets from a young age can then change the way they carry themselves as professionals years later and make them more likely to consider sustainability with every decision they make in their jobs. This can, in turn, prevent things like “greenwashing” from occurring because the people behind the scenes are educated on the matter and truly care about advancing sustainability within their companies.

Emilie Delaye, Entrepreneurship Major, Fashion Management Minor, Senior

I believe that one major role Gen Z individuals studying fashion merchandising and design can play in the industry deals with legislation. Our generation is being educated on these intricate and delicate issues at hand. With the education, we can provide a framework and legal structure that will define what classifies as “sustainable,” and that actively works against greenwashing. Hopefully, we can build a system that ensures brands are backing up their claims and feel the need to act ethically and transparently rather than simply acting in the best interests of their companies.

Hannah Laurits, Graduate Student, Fashion and Apparel Studies

I’m excited to see the increasing presence of Generation Z in the workforce, particularly because we are all so passionate about sustainability. I expect that my generation will play a huge role in advancing sustainability within our industry, supply chain, and sourcing practices as this is an issue that we genuinely care about.

In the years to come, as our generation takes on roles as designers, merchandisers, buyers, and more, we will advocate for sustainable practices within our workplaces. Generation Z has the ability to take this from just a business practice to a mindset for a company. Our generation will push for the adoption of conscious practices across all departments across many fashion brands and retailers. I truly believe that we as a generation, will make a significant contribution to a positive shift in the fashion and apparel industry.

Miranda Rack, Fashion Merchandising and Management Major (Honors) & FASH 4+1 Program Graduate Student

Students in the fashion field should be learning about sustainability in their classes. Not only should they be learning about it, but fashion students should also be actively practicing sustainable fashion in their everyday lives. We can take this knowledge to the industry and educate the older generations we will be working with. With sustainable fashion being a relatively new buzzword, we cannot expect all current industry professionals to be as well-versed and subsequently committed. The issue is with education. Consumers still support fast fashion because they are unaware of how it affects people and the planet. The fashion industry must focus on consumer education rather than profit to slow climate change. Educating consumers can start with creating a more transparent and accessible supply chain.   Publicizing their supply chain holds brands accountable for using suppliers who uphold their sustainability initiatives.

Kendall Ludwig, Fashion Merchandising and Management Major & FASH 4+1 Program Graduate Student

Our Generation Z is the most environmentally conscious, but at the same time, we buy the most fast fashion products. That being the case, I believe our generation can greatly advance sustainability within the industry’s supply chain and sourcing practices. As avid internet users, raising awareness through social media is one of the most effective and easiest ways to get brands to respond and take action. Gen Z consumers also have the ability to make change through financial means. As the target market for the biggest fast fashion companies, a generation-wide boycott to demand better sustainable sourcing practices would force companies to listen to stay in business. 

Leah Marsh, Graduate Student (4+1 program), Fashion and Apparel Studies

I believe that my generation can play a significant role in advancing sustainability within the industry’s supply chain and sourcing practices. I have noticed that a handful of my peers and I have started exploring additional career opportunities rather than being a merchandiser or designer. We have begun to open up doors within the industry and some of the job positions that we are currently seeking did not even exist when we started the fashion program at the University of Delaware just 4 years ago. The increase in availability and demand of these alternative sustainability-related careers within the global fashion and apparel industry is extremely promising. For example, after I graduate, I hope to work for a non-profit organization that advocates for garment workers’ rights and environmental policy while also working to prioritize supply chain transparency amongst fashion brands and retailers.

Annabelle Brame, Fashion Design & Product Innovation Major, Senior

We have the knowledge. As professionals, it is important we just continue to educate others. We will end up all across the globe with people in a million different fields, so it is important to remember not everyone knows what we do, and keep the conversation going. When it comes to sustainability and sustainable sourcing, we have to assume the people around us have no idea what we are talking about and continue to teach and touch on deeper topics within this industry. Also, incorporating sustainability into all our fields. As a fashion designer, it is easy to think we don’t have an impact on how we source. In reality, we can choose fabrics based on fiber, think consciously about the mills, and start conversations in the workplace about how we can pattern-make smarter.

How can education and awareness about sustainable apparel sourcing be improved among Generation Z, both as consumers and as future professionals in the fashion industry

Cecilia Goetz, Fashion Merchandising and Management Major (Honors), Senior

Social media is a very powerful tool that can be used to educate Generation Z about sustainable apparel sourcing. Not only can advocates make posts with useful information about sustainability in the fashion industry, but they can get in contact with other members of Gen Z and have meaningful conversations about what can be done to make further progress. This helps to make it a more common discussion and helps to encourage Generation Z customers to keep an eye out for sustainability when shopping.

In the professional world, it is important that companies invest in sustainability initiatives and teams who aim to teach other employees about the subject matter. Those who studied sustainability and related topics can bring this knowledge to the workplace and start workshops, discussion groups, and panels about environmental and social improvements and what every employee can be doing in their role to make improvements. With members of Generation Z focusing on and learning about sustainability from both the production side and consumer side, ethical apparel sourcing is bound to improve in fashion brands around the world.

Emilie Delaye, Entrepreneurship Major, Fashion Management Minor, Senior

One major improvement that I think needs to be done is the focus on how to find reliable information and the skill of critical thinking. Social media and media, in general, have taken over many individuals’ lives today, however, it is known that not all information is true. I think that educating individuals on how to successfully identify whether a source is credible will help reduce the spread of mass misinformation. This, along with the development of critical thinking skills, will ensure that each consumer and professional can create their own opinions on a topic at hand, which in turn will allow our society as a whole to come up with more collaborative and informed decisions on how to tackle the issues we face.

Hannah Laurits, Graduate Student, Fashion and Apparel Studies

Education of sustainable apparel sourcing is extremely important for Generation Z. The best way to improve our generation’s awareness of these issues is by exposing them to real world scenarios and keeping them informed on what is happening in regards to sustainability in the fashion industry. At the University of Delaware, our fashion programs do an excellent job of keeping students informed and engaged with sustainable fashion practices. Sustainability is rooted in the course curriculum in every single fashion class. This is how we improve sustainability awareness in the fashion industry, through consistent exposure, our generation will continue to become the experts in sustainable apparel sourcing.

Miranda Rack, Fashion Merchandising and Management Major (Honors) & FASH 4+1 Program Graduate Student

It is up to brands to be honest with consumers about their apparel sourcing, but it is up to consumers to care. Consumer education and awareness start with transparency by the brand. Generation Z must keep fighting to hold brands accountable. Right now, the best thing consumers can do is to educate themselves on how fast fashion is killing people and the planet. We need to stop shopping at brands that cannot prove to consumers that they value sustainability. We must stop shopping at brands that refuse to publicize their supply chain and sourcing practices. We need to stop taking everything brands say at face value and start working to verify claims on our own terms.

Leah Marsh, Graduate Student (4+1 program), Fashion and Apparel Studies

Education and awareness about sustainable apparel sourcing can be improved among Gen Z by establishing industry standards. Every new sustainable term has a handful of different definitions floating around that ultimately confuse consumers and professionals. There needs to be a standard developed, just like for any other area of study or focus. Consumers need to have something accurate to refer to when they need help making important decisions.

Annabelle Brame, Fashion Design & Product Innovation Major, Senior

As cliche as it may seem, social media. It has an astounding amount of power over our peers and can reach large audiences rapidly. One of the really amazing things that has come from platforms like Tiktok is allowing us to share information creatively. We don’t have to just look at a camera and talk about sourcing, but we can create engaging videos with editing to keep the viewer watching. With so many niches, people can gain a platform that allows them to continue telling the story about sustainability in between feeds of crafts, dancing, and comedy. It allows it to be a recurring reminder between their other programming. That is the key, repetition. It takes persistence from people to grasp the gravity of the issues we face within sustainable apparel sourcing. So it takes us showing up– on the news, social media, and in person.

–END–

FASH455 Video discussion: What global trade deals are really about?

Instructions: In the next few weeks of FASH455, we will learn about many technical aspects of free trade agreements related to apparel sourcing and trade, such as the preferential tariff rates, apparel-specific rules of origin, and trade agreement utilization. However, this presentation takes a different perspective on trade deals– why they are NOT solely about job creation, why trade agreements increasingly focus on “measures behind borders,” and why international institutions like the World Trade Organization (WTO) were established.

Feel free to share your thoughts on the video. You may focus on 1-2 specific points that you find interesting, intriguing, controversial, or debatable and then explain your arguments. You could also propose additional discussion questions for your classmates.

Terminologies mentioned in the video and background notes:

  • Quota: A quantity restriction on imports. Before 2005, the global textile and apparel trade was subject to 30 years+ quota restrictions. See here for the background information.
  • Tariff: A tax levied on imports only. Deemed as “import-sensitive,” US still imposes a much higher tariff rate for textile (8.0%) and apparel products (11.6%) than other manufactured goods (2.2%) on average in 2023. See the World Tariff Profile 2023.
  • Non-tariff barriers (NTB): refers to trade barriers other than tariffs, such as technical barriers of trade (TBT), Sanitary and Phytosanitary (SPS) measures, customs procedures, import licensing, and many others. See more examples here.
  • GATT and WTO: The General Agreement on Tariffs and Trade (GATT) was a temporary international treaty signed in 1947 by 23 countries (including the United States). GATT aimed to boost trade-led economic recovery after World War II. Since then, GATT members conducted nine major rounds of negotiations to gradually reduce trade barriers, ultimately establishing the World Trade Organization (WTO) in 1995 as the permanent body governing world trade.
  • Trans-Pacific Partnership (TPP): A trade agreement reached by eleven countries in the Asia-Pacific region (Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam) and the United States in 2016. However, the Trump Administration announced the withdrawal of the United States from TPP in January 2017. Afterward, without the US, the other 11 TPP members reached the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), which officially entered into force in December 2018.

Why the Developing World and All of Us Need Trade and the WTO (Panel Discussion)

CSIS event on Sep 22, 2023

Below are selected comments by US Trade Representative Katharine Tai (Tai) and WTO (World Trade Organization) Director-General Dr. Ngozi Okonjo-Iweala (Ngozi).

What kind of global trade do we want today?

“For decades, the United States has been proud to champion the international rules-based order and the multilateral trading system…But the functioning and fairness of this order are now in question and that is why all of us need to adapt to a more challenging era marked by rapid technological change, increasing extreme climate events, vulnerable supply chains, intensifying geopolitical friction, widening inequality” (Tai)

“The United States is writing a new story on trade. We are pursuing fair competition, addressing the climate crisis, promoting our national security, and ensuring the rules-based system helps all economies, not just the biggest ones.” (Tai)

“how can we harness the effectiveness of our trade tools to be promoting not just efficiency and liberalization, but using those tools to promote what we consider certainly today to be higher goals. And those goals are resilience for our economy and the word economy, sustainability, again, for our economy in the world economy, and inclusivity… we started to see where the concentrations in supply and production started to impact this and spike this economic insecurity on a macro level and also for individuals” (Tai)

Trade and climate change

trade is necessary to disseminate green technologies and through competition and scale efficiencies to drive down the cost of decarbonization. Another reason is that trade amplifies the impact of environmental policy action. Recent research at the WTO demonstrate that just as countries can reap economic gains by focusing on what they are relatively good at, the world can reap environmental gains if countries focus on what they are relatively green at” (Ngozi)

Is trade diversification the future?

A fragmented world economy would not just be bad for already-squeezed household budgets. Without trade, it would become harder, even impossible, to meet the big challenges of our time – resilience, socioeconomic inclusion, and climate change… The problems we encountered in the trading system were less about trade per se and more about excessive concentration for some products and supply relationships. The smart response is to deepen, diverse, and deconcentrate production so there are fewer potential bottlenecks” (Ngozi)

“we believe we can solve the problem by diversifying the supply chains not just to ourselves or to friends but to all over the world where the opportunity exists. Business should look at the possibility of not just doing China+1. It means China plus Vietnam or Indonesia. But they can do Bangladesh. They can do Laos. They can do Rwanda. They can do Senegal. They can do Nigeria. I’m just – Morocco” (Ngozi)

Debate the impact of trade

Technology was generally a big culprit in job losses…U.S. manufacturing output, the volume of products produced here, is about as high as it has ever been. But the sector employs more machines and fewer people than it used to. Nevertheless, import competition was a significant factor and an easier focus, I think, for political anger.” (Ngozi)

“…between 1995 and 2011, while increased goods import from China did eliminate 2 million jobs in the United States, increased exports to China and elsewhere added 6.6 million jobs to the U.S. economy, 4 million of them from higher-services exports…These numbers illustrate the power of trade for job creation. But as we know, those new jobs were not created in the same places. Neither did they go to the same people. That a backlash would result from those left out was perhaps predictable, but it was not inevitable. There are countries that use domestic-policy levers to translate gains from trade into broadly shared growth by providing people security against income loss and support to seize new opportunities.” (Ngozi)

Renew or update the African Growth and Opportunity Act?

“The world is really different from when AGOA was first created…So I think copy-paste is to really lose an important opportunity…we should be practical. Also, we’re on a timeline…The AfCFTA, the African Continental Free Trade Area, that has been concluded, that has that has been brought into being by the countries on the continent. And those continental integration aspirations should absolutely be reflected in our offer to Africa, and something we should try to figure out how to incorporate” (Tai)

African countries appreciate AGOA. They would like to see an agreement that is, you know, at least a decade out so that they have some predictability. What they’re hearing from investors is that with this up in the air, they can’t make up their minds whether to invest or not because they don’t know what will happen. So I think if we can reform and get it done, and people can have a predictable time horizon for AGOA, it would really help” (Ngozi)

How to reform the World Trade Organization?

“The United States wants a WTO where dispute settlement is fair and effective, and supports a healthy balance of sovereignty, democracy, and economic integration where all members embrace transparency, where we have better rules and tools to tackle non-market policies and practices, and to confront the climate crisis and other pressing issues.” (Tai)

“We must recognize the diversity of developing members. We should have flexibilities in the rules that reflect actual needs. But we cannot have economic and manufacturing powerhouses gaming the system by claiming the same development status and flexibilities intended for less-advantaged members.” (Tai)

“people ask me all the time, oh, are you worried because there are so many [Free trade agreement, FTA]? I’m not. Like I said, 75 percent of trade still goes on WTO terms [MFN tariff rates]. And we can learn from them.” (Ngozi)

I don’t have enough time and money to waste resources in Geneva on a process that we don’t actually believe in…When President Biden talks about it from the floor of the United Nations General Assembly, if we still have trading partners who want to question our seriousness, then I think the problem is those partners and it’s not us” (Tai) [note: this comment was mentioned by Politico]

–END–

FASH455 Debate: Is the U.S. Textile Manufacturing Sector a Winner or Loser of Globalization and International Trade? (Updated September 2023)

(note: the following comments are from students in FASH455 based on the video “Textile Manufacturing in America, post-globalisation

Argument: The U.S. textile manufacturing industry has been a winner of globalization

Comment #1: While it is true that many Americans lost their jobs due to the increase in trade, there are more benefits to both importing and exporting rather than the mercantilist view of trade. Increasing trade and globalization, especially during the Clinton administration, was an opportunity to develop strong relationships with other nations. The value of U.S. textile exports since 2000 has risen by 30% for yarn and 15% for fabric, after the establishment of agreements such as NAFTA. Additionally, one of the U.S. apparel manufacturers in the video used machinery for their production from Sweden. Without globalization and trade, they would not be able to use this high-tech equipment. All in all, U.S. textile manufacturing sector benefits from both importing and exporting goods.

Comment #2: Deeper down, the US textile sector seems to be winning in the long run. The squeeze that globalization has placed on them has allowed for innovation within the industry as they fight to stay relevant and compete with overseas goods. Operational slack such as high turnover jobs have been eliminated with automation, and US manufacturers gained a new branding niche that overseas companies do not: a US “personal touch.” Consumers may now be more willing to pay more for a garment just because it says it is made in the USA. USA-made clothing may now be perceived as higher quality and more scarce. The sentiment towards US-made goods and their quality could enact change to reduce overseas reliance, which is a win for US manufacturing in the long run. Additionally, globalization expands the export market for the US textile manufacturing sector.

Comment #3: As discussed in the video, there is a growing trend of reshoring and regionalization in some manufacturing sectors, including textiles. Some U.S. textile manufacturers have seized this opportunity to bring production back to the United States, capitalizing on the advantages of local supply chains, quality control, and speed to market. The video also shows how technology and automation can help streamline production processes and make manufacturing more competitive, even in higher-cost regions like the United States. US textile manufacturers have invested in innovation and automation, making them competitive in producing textiles with advanced features and properties in today’s global economy. It is globalization that is pushing the US textile industry to adopt these new technologies and continue improving its international competitiveness.”

Argument: the U.S. textile manufacturing industry has been a loser of globalization

Comment #4: One of the biggest arguments for globalization is the lower prices & affordability for the consumer. From this perspective, it seemed that the United States was a winner of globalization as a whole. However, when beginning to look at the consequences of moving production overseas, we not only see the textile manufacturing sector being affected, but we also see this impact disperse to the communities in America as well. When brands offshore and outsource production overseas for lower prices & labor, our very own US textile manufacturing industry is losing out on this business. It also forces this industry into a highly competitive environment that does not have equal “playing fields” and does not have insurance/protection in case environmental factors ruin crops. The US has clear labor laws and human rights policies (as well as increasing environmental policies), whereas their cotton-growing competitors, for instance, do not have to follow the same rules. This allows labor exploitation to decrease costs and makes US companies seem unappealing or less competitive.

Comment #5: Over the past few decades, the number of manufacturing jobs in the US textile industry has plummeted after companies began moving production overseas, specifically to countries like China, which have preferential treatment. These foreign facilities can produce things much faster and cheaper because the standards and regulations are completely different than those of the United States. Free trade does not consider these differences in labor and environmental laws, making it much less “free” than it claims. As countries overseas– specifically China and regions like Xinjiang– continue to not play by the rules, the US is forced to keep up by implementing things like the Toyota System…Americans want to be the best in manufacturing and globalization often gets in the way of this. With near-shoring, the US can reclaim high-quality, American-made garments while helping with job security and sustainability.

Comment #6: Overall, I believe that the U.S. textile manufacturing industry is a loser of globalization and international trade, mostly due to the competition from overseas. This competition includes more manufacturers from other countries, but also the competition of pricing since other oversea manufacturers are able to sell their cotton/textile materials at a lower price. Since the U.S. struggles to compete with these lower prices, they are forced to look for another way to have a competitive advantage in the textile manufacturing sector, such as lean manufacturing and technology improvements. At Carolina Cotton Works, Bryan Ashby shares how they have increased efficiency and use high-quality machines (note: imported) for their products. Although this sounds great, this also means that there are fewer workers.  

Comment #7: Globalization creates a trade dependence on imports. It’s important we don’t depend on things for when things happen that we can’t predict like the pandemic where we can’t import anymore. Since there was a lack of local textile manufacturing and sourcing in the United States compared to what was being imported, there was less of a chance for technological advances and improvement in the United States textile manufacturing sector. Post Globalization, however, may be the chance for the United States to bring back the textile manufacturing sector momentum. I think this because the United States has seen the result of heavily relying on other countries for their cheap labor/sources, and this could add extra motivation for companies to want to figure out better alternatives in manufacturing in their own country.

Comment #8: I think currently the US is a loser to globalization only because brands want to get the product for cheap. I think brands think that would create more profit that way. However, I do believe we could get to a future where more things would be created in the US and wouldn’t have to pay that much in tariffs and other external prices. I think it would help boost people to work more. I think people are worried about making things in our country because of the relations we have with other countries.

Discussion questions:

Do you agree or disagree with any particular argument above? Any follow-up comments on the impact of globalization on the US textile manufacturing sector? What should government do with trade given the debates? Please feel free to share any additional thoughts.

Video Discussion: The Global Travels of a T-shirt

For FASH455 students: Please share your reflections on the video. For example, how does the video illustrate the global nature of the textile and apparel industry today? How can we understand the impact of globalization on the many stakeholders involved in the textile and apparel supply chains? Do the textile and apparel trade patterns described in the video support or challenge the trade theories we discussed in class? According to the video, what are the debates and controversies related to apparel sourcing and trade? What is your view and proposed solutions?   

Patterns of US Apparel Imports (Updated September 2023)

First, while US apparel imports gradually recovered, the import demand remained weak overall. For example, US apparel imports in July 2023 increased by 0.9% in value and 2% in quantity from June (seasonally adjusted). However, the trade volume still experienced a decrease of approximately 17-18% compared to the previous year. Meanwhile, the US consumer confidence index fell again in August 2023, suggesting the economic uncertainties are far from over. Notably, so far in 2023 (January to July), US apparel imports decreased by 22.3% in value and 28% in quantity from the previous year, the worst performance since the pandemic.

As a silver lining, the price of US apparel imports has stabilized, although inflation remains an issue for the US economy.  

Secondly, because of the seasonal pattern, Asian countries were able to capture relatively higher market shares since June. For example, measured in value, China, ASEAN, and Bangladesh accounted for over 64% of total US apparel imports in July 2023, a notable increase from 61% in June and 58% in May 2023.

Nevertheless, US fashion companies continue diversifying their sourcing base to mitigate various supply chain risks and rising geopolitical tensions. For example, the HHI Index for US apparel imports dropped to 0.097 in the first seven months of 2023, which is lower than the 0.106 recorded in the same period the previous year (January to July 2022), indicating a greater diversity in the sources of imports.

Third, despite an apparent rebound in exports to the US, China continued to experience a further decline in its market share. For instance, in July 2023, China’s market share was more than 3 percentage points lower in value (27.2% in July 2022 vs. 24.1% in July 2023) and 2.5 percentage points lower in quantity (43.1% in July 2022 vs. 40.6% in July 2023). This marked the worst performance since April 2023. In other words, consistent with recent industry surveys, US fashion companies continue to reduce their China exposure given the adverse business environment.

Fourth, the latest data suggests that US apparel imports from CAFTA-DR members remain stagnant, and some critical problems, such as the underutilization of the agreement, even worsened. For example, about 9.5% of US apparel imports in value and 8.5% in quantity came from CAFTA-DR members in July 2023, lower than 10.2% and 9.0% in the previous year (i.e., July 2022). In absolute terms, US apparel imports from CAFTA-DR in 2023 were about 20% lower than in 2022.

Additionally, CAFTA-DR’s utilization rate (i.e., the value of imports claiming the duty-free benefits under CAFTA-DR divided by the total value of imports from CAFTA-DR) fell from 70.2% in 2022 (Jan to July) to a new low of 69.2% in 2023 (Jan to July). Likewise, the value of imports utilizing CAFTA-DR’s short supply decreased by more than 20%. Thus, how to leverage CAFTA-DR to meaningfully encourage more US apparel imports from the region, particularly in light of US fashion companies’ eagerness to reduce their exposure to China, calls for sustained efforts and probably new strategies.

by Sheng Lu

Primark’s Global Sourcing for Apparel (Updated September 2023)

Primark’s sourcing strategies

According to Primark, it does not own any factories but sources all apparel products from contracted factories. Any contracted factory that manufactures products for Primark must meet internationally recognized standards before receiving the first sourcing order.

As of October 2022, Primark sourced from 883 contracted factories in 26 countries (note: it was a slight decline from 928 contracted factories in 28 countries as of May 2021). Of these factories, 85.5 percent were Asia-based because of the region’s massive production capacity and a balanced offer of various sourcing factors, from cost, speed to market, and flexibility to compliance risks.

Like many other EU-based fashion companies, near-shoring from within the EU was another critical feature of Primark’s sourcing strategies. About 14 percent of Primark’s contracted garment factories were EU-based (including Turkey).

Measured by the number of workers, Primark’s Asian factories were larger than their counterparts in other parts of the world. For example, while Primark’s factories in Pakistan and Bangladesh typically have more than 2,500+ workers, its factories in Western EU countries like the UK, Germany, Italy, and France, on average, only have 64-200 workers. This pattern suggests that Primark mainly uses Asian factories to fulfill volume sourcing orders, and its EU factories mainly produce replenishment or more time-sensitive fashionable items.

Meanwhile, similar to the case of other retailers like PVH, Primark’s contracted garment factories in China were smaller than their peers in the rest of Asia. For instance, while over 90% of Primark’s garment factories in Bangladesh employ more than 1,000 workers, around 43% of their contracted factories in China have fewer than 100 workers. This pattern suggests Primark could use China as an apparel sourcing base primarily for orders requiring greater flexibility and agility and those involving a wider variety of products but in smaller quantities.

Further, reflecting the unique role of the garment industry in creating economic opportunities for women, females account for more than half of the workforce in most garment factories that make apparel for Primark. The percentage was exceptionally high in developing countries like Tunisia (94%), Morocco (91%), Pakistan (69%), Sri Lanka (69%), Myanmar (64%), India (62%), and Vietnam (59%).

According to Primark (as of September 2023), its Ethical Trade and Environmental Sustainability team comprises over 120 specialists based in key sourcing countries. The team conducts around 3,000 supplier audits a year to monitor compliance (i.e., fair pay, safety, and healthy working conditions.) Additionally, Primark says its factories were in line with the company’s environmental code of conduct, and the company “donated any unsold merchandise to the Newlife Foundation in Europe and KIDS/Fashion Delivers in the US.

by Sheng Lu

Discussion questions:

What are the unique aspects of Primark’s apparel sourcing strategies? What role does sourcing play in supporting Primark’s business success? Any questions or suggestions for Primark regarding its sourcing practices?

Video Discussion: Why China’s Banned Cotton Keeps Sneaking Into U.S. Supply Chains (WSJ)

Discussion questions: What factors contribute to the complexity of eliminating banned Xinjiang cotton from the apparel supply chain? How can the current efforts be enhanced to better address the situation and by whom? Feel free to share any other reflections on the video and the graphs.

Further reading:

FASH455 Industry/Internship Stories—Hannah Laurits, Haddad Brands

Hannah Laurits (second from the right) worked as a sourcing intern for Haddad Brands in New York City in the summer of 2023. In the picture, Hannah was visiting the company’s world class distribution center in New Jersey.

About Hannah Laurits

Hannah Laurits is a master’s student in the Department of Fashion and Apparel Studies (FASH) at the University of Delaware (UD). She also received her B.S. from UD & FASH with a double major in apparel design and fashion merchandising and management.

Hannah is passionate about adaptive clothing and making the fashion industry more inclusive and sustainable. She has participated in several related research projects, including working at UD’s Health and Innovation Lab and designing adaptive clothing for children with Down syndrome. Hannah’s master’s thesis explores U.S. retailers’ merchandising and business strategies for adaptive clothing. As a graduate instructor, Hannah teaches FASH133 (Foundations for Fashion Innovation), an important foundational course for FASH freshmen. Hannah is the recipient of the 2023 International Textiles and Apparel Association (ITAA) Sara Douglas Fellowship in recognition of her academic excellence and accomplishments.

During the summer of 2023, Hannah had the exceptional opportunity to work as a sourcing intern for Haddad Brands in New York City. Below, she shared her reflections on this incredible internship experience.

Question: What does a typical day look like during your sourcing internship with Haddad?

Hannah: Each day, I would enter Haddad’s beautiful Manhattan office and make my way up to my desk on the 10th floor, which was home to the design and sourcing departments. I had the opportunity to sit next to my mentor and assist her in her day-to-day tasks as a Fabric and Trim Research &Development (R&D) Manager. This often consisted of maintaining fabric/trim development digital and physical libraries, creating new fabric swatch headers, entering fabric/trim data in PLM, partnering with Product Development to establish fabric and trim codes for PLM, and analyzing new fabric developments. I also assisted in collaborating and developing fabrications, finishes, and trims with our supply chain by communicating feedback via internal emails.

One thing that  I really enjoyed was that each day consisted of working cross-functionally with the different teams. I helped prepare for and sit in on weekly fabric/trim development status meetings with the various Design teams where fabric/trim developments for the upcoming seasons were discussed and designers would make new fabric requests for their added styles. I also sat in on bi-weekly fabric/trim development status meetings with the Product Approval team to ensure the fabric samples from mills were up to standard for development. Here, I was able to help weigh in on fabrics and compare them to our standards to determine if they met our requirements or if they needed to be changed and how. Additionally, some days included meetings with various suppliers to discuss innovations in fiber, fabric, finish, and trim.

Being part of an internship that enabled me to perform meaningful work from day one, provided countless opportunities for personal growth, and exposed me to working with some of the most iconic global brands (e.g., Levi’s) was a truly fulfilling experience.

Question: Any major projects did you work on during your internship? What did you learn from the experiences?

Hannah:Each Haddad Legacy Intern was assigned and worked on a project for their department based upon a real business need. Based on my educational background and my passion for sustainability, my team outlined a project that would best fit. This involved researching innovative sustainable solutions and sourcing practices to further their sustainability efforts.

My research was not only conducted from outside sources but from internal ones as well. I felt an immense amount of support from all of the individuals who helped me accomplish this project and was excited to learn that they also are just as excited about sustainable practices as I am. At the end of the internship, each intern had the chance to present to senior management our individual projects. This experience taught me how to create a visually compelling presentation and relay large amounts of data concisely and effectively.

Question: What insights did you learn about the fashion apparel industry from the internship? For example, the key issues the industry cares about or the challenges it faces.

Hannah:From my internship experience, I was able to see firsthand key topics important to the fashion/apparel industry; specifically, two areas caught my attention.

First, sustainability and social responsibility. Consumers and investors are seeking more sustainable products and better practices from the brands they love. Considering this, sustainability-forward brands are focused on maintaining their high values regarding these areas and keeping their practices aligned with them.

Second, the fashion industry is constantly seeking innovative technology solutions, including in the sourcing and supply chain areas. Technology is evolving faster than ever, helping create efficient solutions to drive the fashion industry forward. Technologies such as 3D printing, AI, laser cutting, and more are being used to improve the industry in various ways such as trend forecasting, supply chain, and consumer experience, just to name a few. Even regarding sustainability, many fashion brands are investing in or actively exploring new technology solutions to help them develop a more sustainable and ethical supply chain and improve sourcing transparency, traceability, and accountability.

Question: How do your learning experiences at FASH help with your internship? Any specific knowledge or skill sets do you find most critical?

Hannah:FASH had a great influence on my decision to pursue a sourcing internship with Haddad Brands. It was through the UD & FASH department’s Fashion Career Meetup that I was able to connect with the amazing HR team at Haddad Brands and learn more about the company.

Specifically, it was FASH455 (Global Apparel Trade and Sourcing) that piqued my interest in the world of sourcing and provided foundational knowledge for my internship. Working in fabric research and development, on a daily basis, I referred back to key concepts from FASH215 (Fundamentals of Textiles I) and FASH220 (Fundamentals of Textiles II) on fiber, yarn, fabric, structures, color, and finish. Additionally, the FASH Social Responsibility and Sustainability certificate courses played a unique role in my experience, helping me bring a sustainability forward perspective into my internship and providing a solid background to further build upon for my internship project.

Furthermore, the FASH department at UD excels at providing students with extensive foundational fashion industry knowledge. Not only is the course curriculum excellent, but so is the faculty who goes above and beyond to help foster student’s education and build critical professional skills.

Question: What’s your plan after graduation?

Hannah:I am currently working on wrapping up my master’s program and am on track to graduate in May 2024. I am seeking a full-time role that allows me to have a hand in developing products that have a positive impact on people and the planet. Potential roles include sustainability, social compliance, sourcing, product development, and product line management related to fashion apparel products. While I am originally from Delaware, I am hoping to relocate to a city on the East Coast such as NYC, Philadelphia, or Baltimore. However, I am open to considering job opportunities and locations beyond this scope. As my graduation approaches, I am eager to begin my career in the fashion apparel industry.

Meanwhile, I am actively seeking winter and spring internship opportunities in the greater Philadelphia area or remote positions to enhance my professional development.

–END—

FASH455 Video Discussion: How Temu Makes Money From $4 Jackets and $10 Smartwatches?

Discussion questions:

#1 What are the examples of globalization in the above two videos about Temu?

#2 Based on the videos, who are the winners and losers of globalization and why?

#3 What role does international trade play in Temu’s business model?

#4 Some suggest ending the “de minimis rule.” Based on the videos, what is your view and recommendation for US policymakers?

#5 Anything you find interesting/surprising/intriguing in the video and why?

(Note: Anyone is welcome to join the discussion. For students in FASH455, please address at least two questions. Please mention the question number in your response, but there is no need to repeat the question).

Note: About de minimis rule.”: Under US customs law, specifically the Trade Facilitation and Trade Enforcement Act of 2015, import duties are generally waived for goods valued at $800 or less per person per day. Therefore, Temu’s shipping from China to US consumers is likely to be eligible for the benefits.

[Discussion is closed for this blog post]

WTO Reports World Textiles and Clothing Trade in 2022

Note: the World Textiles and Clothing Trade in 2023 is available:

Lu, S. (2024). World Textile and Clothing Trade: Key Patterns and Emerging Trends. Global Textile Academy, International Trade Centre, Geneva, Switzerland.

This article comprehensively reviewed the world textiles and clothing trade patterns in 2022 based on the newly released World Trade Organization Statistical Review 2023 and data from the United Nations (UNComtrade). Affected by the slowing world economy and fashion companies’ evolving sourcing strategies in response to the rising geopolitical tensions, mainly linked to China, the world’s textiles and clothing trade in 2022 displayed several notable patterns different from the past.

Pattern #1: The expansion of world clothing exports witnessed a notable deceleration in 2022, primarily attributed to the economic downturn. Meanwhile, the world’s textile exports decreased from the previous year, affected by the reduced demand for textile raw materials used to produce personal protective equipment (PPE) as the pandemic waned.

  • The world’s clothing exports totaled $576 billion in 2022, up 5 percent year over year, much slower than the remarkable 20 percent growth in 2021. The slowed economic growth plus the unprecedented high inflation in major apparel import markets, particularly the United States and Western European countries, adversely affected consumers’ available budget for discretionary expenditures, including clothing purchases.
  • The world’s textile exports fell by 4.2 percent in 2022, totaling $339 billion, lagging behind most industrial sectors. Such a pattern was understandable as the demand for PPE and related textile raw materials substantially decreased with the pandemic nearing its end.

Pattern #2: China continued to lose market share in clothing exports, which benefited other leading apparel exporters in Asia. Notably, for the first time, Bangladesh surpassed Vietnam and ranked as the world’s second-largest apparel exporter in 2022.

  • In value, China remained the world’s largest apparel exporter in 2022. However, China’s clothing exports experienced a growth of 3.6 percent, below the global average of 5.0 percent, positioning China at the bottom of the top ten exporters.
  • China’s global market share in clothing exports dropped to 31.7 percent in 2022, marking its lowest point since the pandemic and a significant decrease from the approximate 38 percent recorded from 2015 to 2018. In fact, China lost market share in almost all major clothing import markets, including the US, the EU, Canada, and Japan. The concerns about the risks of forced labor linked to sourcing from China and the deteriorating US-China relations were among the primary factors driving fashion companies’ eagerness to reduce their ‘China exposure” further.
  • China has been diversifying its clothing exports beyond the traditional Western markets in response to the challenging business environment. For example, from 2021 to 2022, Asian countries, especially members of the Regional Comprehensive Economic Partnership (RCEP), became relatively more important clothing export markets for China. Nevertheless, since RCEP members primarily consist of developing economies with ambitions to enhance their own clothing production, the long-term growth prospects for their import demand of ‘Made in China’ clothing remain uncertain.
  • Bangladesh achieved a new record high in its market share of world clothing exports, reaching 7.9 percent in 2022, which exceeded Vietnam’s 6.1 percent. Many fashion companies regard Bangladesh as a promising clothing-sourcing destination with growth potential because of its capability to make cotton garments as China’s alternatives, competitive price, and reduced social compliance risks.
  • Fashion companies’ efforts to “de-risking from China” also resulted in the robust growth of clothing exports from other large-scale Asian clothing producers in 2022, including Vietnam (up 13 percent), Cambodia (up 12 percent), and India (up 10 percent). In other words, despite the concerns about China, fashion companies still treat Asia as their primary sourcing destination.

Pattern #3: Developed countries stay critical textile exporters, and middle-income developing countries gradually build new textile production and export capability.

  • The European Union members and the United States stayed critical textile exporters, accounting for 25.1 percent of the world’s textile exports in 2022, up from 24.5 percent in 2021 and 23.2 percent in 2020. Thanks to the increasing demand from apparel producers in the Western Hemisphere, U.S. textile exports increased by 5 percent in 2022, the highest among the world’s top ten.
  • As a persistent long-term trend, middle-income developing countries have consistently been strengthening their textile production and export capability. For example, China, Vietnam, Turkey, and India’s market shares in the world’s textile exports have steadily risen. They collectively accounted for 56.8 percent of the world’s clothing exports in 2022, a notable increase from only 40 percent in 2010. Also, over time, these middle-income developing countries have achieved a more balanced textiles-to-clothing export ratio.

Pattern #4: Regional textile and apparel trade patterns strengthened further with the growing popularity of near-shoring, particularly in the Western Hemisphere. However, an early indication has emerged that Asian countries are diversifying their sources of textile raw materials away from China to mitigate growing risks.

  • The regional textile and apparel supply chains were in good shape in Asia and Europe. For example, nearly 80 percent of Asian countries’ textile input and apparel imports came from within the region in 2022. Likewise, approximately half of EU countries’ textile imports were intra-region trade in 2022, and one-third were for apparel.
  • The Western Hemisphere (WH) textile and apparel supply chain became more integrated in 2022 thanks to the booming near-shoring trends. For example, 20.8 percent of WH countries’ textile imports came from within the region in 2022, up from 20.1 percent in the previous year. Likewise, about 15.1 percent of WH countries’ apparel imports came from within the region in 2022, higher than 14.7 percent in 2021 and 13.9 percent in 2022.
  • Compared with Asia and the EU, SSA clothing producers used much fewer locally-made textiles (i.e., stagnant at around 11% from 2011 to 2022), reflecting the region’s lack of textile manufacturing capability. A more comprehensive examination of strategies for bolstering the textile manufacturing sector in Sub-Saharan Africa, particularly in light of the recently enacted African Continental Free Trade Area (AfCFTA) agreement, might be warranted.
  • Additionally, data suggests that Asian countries began diversifying their textile imports away from China to mitigate supply chain risks. For example, with the official implementation of anti-forced labor legislation in the US and other primary apparel import markets directly targeting cotton made in China’s Xinjiang region, Asian countries significantly reduced their cotton fabric imports (SITC code 652) from China in 2022. Instead, Asian countries other than China accounted for 46.3 percent of the region’s textile supply in 2022, up from around 42-43 percent between 2019 and 2021.
  • It is critical to watch how willing, to what extent, and how quickly Asian countries can effectively reduce their dependency on textile supplies from China. The result is also an important reminder that Western fashion companies’ de-risking from China could exert significant and broad impacts across the entire supply chain beyond finished goods.

By Sheng Lu

Further reading: Lu, Sheng (2023).Key trends to watch as world clothing trade moves from China to wider Asia in 2023. Just-Style.

2023 USFIA Fashion Industry Benchmarking Study Released

The full report is available HERE

USFIA webinar (Aug 2023)

Key findings of this year’s report:

#1 U.S. fashion companies are deeply concerned about the deteriorating U.S.-China bilateral relationship and plan to accelerate “reducing China exposure” to mitigate the risks.

  • Respondents identified “Finding a new sourcing base other than China” as a more prominent challenge in 2023 than the previous year (i.e., 4th in 2023 vs. 11th in 2022).
  • This year, over 40 percent of respondents reported sourcing less than 10 percent of their apparel products from China, up from 30 percent of respondents a year ago and a notable surge from only 20 percent in 2019. Similarly, a new record high of 61 percent of respondents no longer use China as their top supplier in 2023, up from 50 percent of respondents in 2022 and much higher than only 25-30 percent before the pandemic.
  • Nearly 80 percent of respondents plan to reduce apparel sourcing from China over the next two years, with a record high of 15 percent planning to “strongly decrease” sourcing from the country. This strong sentiment was not present in past studies. Notably, large-size U.S. fashion companies (with 1,000+ employees) that currently source more than 10 percent of their apparel products from China are among the most eager to de-risk.

#2 Tackling forced labor risks in the supply chain remains a significant challenge confronting U.S. fashion companies in 2023.

  • Managing the forced labor risks in the supply chain” ranks as the 2nd top business challenge in 2023, with 64 percent of respondents rating the issue as one of their top five concerns.
  • Most surveyed U.S. fashion companies have taken a comprehensive approach to mitigating forced labor risks in the supply chain. Three practices, including “asking vendors to provide more detailed social compliance information,” attending workshops and other educational events to understand related regulations better,” and “intentionally reducing sourcing from high-risk countries,” are the most commonly adopted by respondents (over 80 percent) in response to forced labor risks and the UFLPA’s implementation.
  • Since January 1, 2023, U.S. Customs and Border Protection (CBP)’s UFLPA enforcement has affected respondents’ importation of “Cotton apparel products from China,” “Cotton apparel products from Asian countries other than China,” and “Home textiles from China.”
  • U.S. fashion companies are actively seeking to diversify their sourcing beyond Asia to mitigate the forced labor risks, particularly regarding cotton products.

#3 There is robust excitement about increasing apparel sourcing from members of the Dominican Republic-Central America Free Trade Agreement (CAFTA-DR).

  • CAFTA-DR members play a more significant role as an apparel sourcing base this year. Over 80 percent of respondents report sourcing from CAFTA-DR members in 2023, a notable increase from 60 percent in the past few years. Also, nearly 30 percent of respondents placed more than 10 percent of their sourcing orders with CAFTA-DR members this year, a substantial increase from only 19 percent of respondents in 2022 and 10 percent in 2021.
  • About 40 percent of respondents plan to increase apparel sourcing from CAFTA-DR members over the next two years. Most respondents consider expanding sourcing from CAFTA-DR as part of their overall sourcing diversification strategy.
  • With U.S. fashion companies actively seeking immediate alternatives to sourcing from China and Asia, respondents emphasize theincreased urgencyof improving textile raw material access to promote further U.S. apparel sourcing from CAFTA-DR members. “Allowing more flexibility in sourcing fabrics and yarns from outside CAFTA-DR” was regarded as the top improvement needed.

#4 US fashion companies demonstrate a solid dedication to expanding their sourcing of clothing made from recycled or other sustainable textile fibers:

  • Nearly 60 percent of respondents say at least 10 percent of their sourced apparel products already use recycled or other sustainable textile fibers. Another 60 percent of surveyed companies plan to “substantially increase sourcing apparel made from sustainable or recycled textile materials over the next five years.”
  • Addressing the higher sourcing costs and the low-profit margins are regarded as the top challenge for sourcing clothing using recycled or other sustainable fiber.
  • About 60 percent of respondents also call for policy support for sourcing clothing using recycled or other sustainable textile materials, such as preferential tariff rates and guidance on sustainability and recycling standards.

#5 Respondents strongly support and emphasize the importance of the early renewal of the African Growth and Opportunity Act (AGOA) and extending the program for at least another ten years.

  • Respondents sourcing from AGOA members are typically large-scale U.S. fashion brands or retailers (with 1,000+ employees). Generally, these companies treat AGOA as part of their extensive global sourcing network and typically source less than 10 percent of the total sourcing value or volume from the region.
  • About 40 percent of respondents view AGOA as “essential for my company to source from AGOA members.
  • About 60 percent of respondents say the temporary nature of AGOA “has discouraged them from making long-term investments and sourcing commitments in the region.” Many respondents expect to cut sourcing from AGOA members should the agreement is not renewed by June 2024.
  • About one-third of respondents currently sourcing from AGOA explicitly indicate, “Ethiopia’s loss of AGOA eligibility negatively affects my company’s interest in sourcing from the entire AGOA region.” In comparison, only about 17 percent of respondents say they “have moved sourcing orders from Ethiopia to other AGOA members.

Other topics covered by the report include:

  • 5-year outlook for the U.S. fashion industry, including companies’ hiring plan by key positions
  • The competitiveness of major apparel sourcing destinations in 2023 regarding sourcing cost, speed to market, flexibility & agility, and compliance risks (assessed by respondents)
  • Respondents’ qualitative comments on the prospect of sourcing from China and “re-risk”
  • U.S. fashion companies’ latest social responsibility and sustainability practices related to sourcing
  • U.S. fashion companies’ trade policy priorities in 2023

Background

This year’s benchmarking study was based on a survey of executives from 30 leading U.S. fashion companies from April to June 2023. The study incorporated a balanced mix of respondents representing various businesses in the U.S. fashion industry. Approximately 73 percent of respondents were self-identified retailers, 60 percent self-identified brands, and 65 percent self-identified importers/wholesalers.

The respondents to the survey included both large U.S. fashion corporations and medium to small companies. Around 77 percent of respondents reported having more than 1,000 employees. And the rest (23 percent) represented medium to small-sized companies with 100-999 employees.

Hinrich Foundation Study: Impact of US anti-forced labor laws on Vietnam’s textile industry

A new study released by the Hinrich Foundation in July 2023 evaluated the impact of the implementation of the Uyghur Forced Labor Prevention Act (UFLPA) on Vietnam’s textile and apparel industry.

The study’s findings were based on interviews with “senior leaders and owners of Vietnam’s garment and textile small and medium-sized enterprises (SMEs).” (Note: However, the study didn’t specify when and how many interviews were conducted.) Below are the summarized key findings:

#1: Vietnam’s textile and apparel industry heavily uses cotton imported from China. As noted in the study, in 2021, China accounted for nearly 30% of Vietnam’s cotton imports (ranked #1, $1.48 billion out of total $4.99 billion imports), surpassing the US ($1.05 billion).

#2: Vietnam’s garment exports may contain Xinjiang cotton. According to the study, “Once the cotton arrives in Vietnam, international intermediary manufacturers create finished garments from semi-finished products to export globally, often using the same materials from banned Chinese suppliers. This results in the ‘laundering’ of Xinjiang cotton.”

#3: Vietnam textile and apparel SMEs report challenges in proving the origin of cotton in fabrics. For example, one respondent says, “Differentiating between cotton products coming from different sources is challenging as they might have been blended while being transported by sea. Suppliers from China, Vietnam, Bangladesh, India, and Pakistan may engage in this practice to falsely label Xinjiang cotton as coming from other locations to circumvent this act.”

#4: Vietnam’s textile and apparel SMEs say the UFLPA implementation has negatively affected their exports to the United States.

  • CBP’s statistics show that (current as of July 1, 2023), since UFLPA’s implementation in June 2022, a more significant amount of Vietnam’s textiles, apparel, and footwear were affected by law enforcement than those from China (e.g., $20 million vs.$16.2 million investigated and $3.53 million vs.$1.04 million denied access).
  • US fashion companies are sourcing LESS from Vietnam due to forced labor concerns. According to one respondent, “My company is producing apparel products for several US-based fashion brands and uses materials from China and exports to the US. Since UFLPA was in place in June 2022, they have ordered less from us. It seems that our partners feel pressure from the regulators, so they are looking for alternative risk-free suppliers.
  • The surveyed SMEs also expect MORE of Vietnam’s textile and apparel exports to be investigated under the UFLPA enforcement down the road. Some SMEs commented that “it would be hard for US firms to rapidly find alternative suppliers in a short time, therefore more checks on Vietnamese cargoes are to be expected.
  • The study acknowledges that “In the worst-case scenario, Vietnamese SMEs may lose market access if their American importers are unable to verify that the supply chain is free from inputs produced via forced labor.”

#5: UFLPA also increased the trade compliance costs of “Made in Vietnam,” a significant challenge to many SMEs. One respondent commented, “Compliance with the UFLPA may pose a challenge for SMEs due to the higher costs associated with providing the necessary documentation of their supply chains. This could be due to the need to conduct additional audits, hire external consultants, or implement new tracking systems.”

Additionally, the report called for Vietnam’s textile and apparel SMEs to 1) diversify the supply chain, especially using more cotton imports from the US, India, Australia, and Brazil. 2) enhance supply chain traceability (note: how to make it happen remains a big question mark); 3) engage in dialogue with US authorities.

U.S. Trade Policy Recap: 2021-2023

Related readings:

Inside Garment Factories in Vietnam, Cambodia, and Sri Lanka (updated April 2023)

Garment factories in Vietnam
Garment factories in Cambodia
Garment factories in Sri Lanka

Discussion questions (proposed by students in FASH455, spring 2023)

  • Based on the videos, does the flying geese concept still work today? Why?
  • Do you think Western fashion brands and retailers’ increasing emphasis on sustainability and social responsibility in apparel sourcing reduces Asian suppliers’ competitive disadvantage? Why or why not?
  • With Asian countries increasingly leveraging their labor advantages alongside advanced technologies, is the prospect of expanding nearshoring even less likely? What is your assessment?
  • What is your vision for the recycled clothing supply chain? Why or why not do you think Asian countries will continue to dominate?

New USITC Report: African Growth and Opportunity Act (AGOA): Program Usage, Trends, and Sectoral Highlights

On April 17, 2023, the US International Trade Commission (USITC) released a new report analyzing the trade and economic impact of the African Growth Opportunity Act (AGOA). The report fulfills the investigation request by the US House of Representatives Committee on Ways and Means in January 2022.

The full report is HERE. Below are the key findings regarding the apparel sector:

The African Growth and Opportunity Act (AGOA) matters significantly to Sub-Saharan African countries (SSA)’s apparel exports to the United States

  • AGOA has been the primary competitive advantage for SSA’s apparel exports to the United States. For example, US apparel imports from AGOA beneficiaries have risen from $953 million in 2001 to $1.4 billion in 2021 (note: up to $1.76 billion in 2022). More than 96.4% of these imports claimed AGOA’s duty-free benefits, including 98.8% utilized the “third-country fabric” provision.
  • While twenty countries were eligible for AGOA’s apparel provision, over 90% of US apparel imports from AGOA members in 2021 originated in five SSA countries: Kenya (31.5%), Madagascar (19.9%), Lesotho (20.6%), Ethiopia (18.3%), and Mauritius (5.1%).
  • AGOA benefits appear essential for SSA countries to maintain their apparel exports to the United States. USITC noted that in every case when a country lost AGOA eligibility between 2000 and 2021, there was a noticeable decrease in US apparel imports from that country, such as Rwanda and Madagascar. (note: according to OTEXA’s latest trade data, US apparel imports from Ethiopia, which lost its AGOA eligibility in 2022, dropped by 42% in the first two months of 2023 from a year ago, far worse than a 5.8% decrease of AGOA members as a whole.)
  • SSA garment manufacturers often find supplying the US apparel market a better fit than Europe, primarily because US brands tend to place orders for higher volume bulk basics, which allows workers to focus on a narrower set of skills.

The impact of AGOA on SSA’s apparel production and exports varied at the country level

  • Some SSA countries (e.g., Kenya and Lesotho) already had well-established apparel industries when AGOA was implemented in 2000. In contrast, other SSA countries (e.g., Madagascar, Ethiopia, Tanzania, and Ghana) received substantial investments from foreign-owned firms after AGOA was enacted, which helped jumpstart their apparel sectors.
  • USITC also identified two “unsuccessful” AGOA cases. For example, Mauritius was the largest AGOA beneficiary apparel supplier to the United States in 2000 but has since fallen to the fifth-largest in 2021, largely due to increased labor costs. Likewise, South Africa’s apparel export to the US was negatively affected by its disqualification from the “third-country fabric” provision under AGOA.

AGOA has had a limited impact on building an integrated regional textile and apparel supply chain in SSA

  • Currently, SSA countries primarily participate in the cut-and-sew operations of apparel based on imported textile raw materials from outside the region (mostly from Asia).
  • The USITC identified several challenges in building the local textile industry in SSA. For example, building a textile mill typically requires much higher investments (e.g., $200–300 million) than a garment factory (i.e., $25 million). Also, most SSA manufacturers cannot make the various types of yarns and fabrics in demand from U.S. buyers.
  • The dilemma is not new: Access to textile inputs from sources outside SSA is essential for garment manufacturers in SSA to meet the specifications of US buyers. However, relying on imported textile inputs reduces the incentives for investing in new textile production capabilities in SSA.
  • The USITC report found Mauritius an exception as it has developed a relatively competitive capability in producing cotton fabrics, which are supplied to garment factories in Madagascar. There is also some collaboration between cotton producers in Tanzania and Uganda and Kenya’s textile manufacturers.

US fashion companies generally see SSA as a promising emerging sourcing destination

  • Apparel producers in SSA are less established in global apparel value chains than manufacturers in other parts of the world. Therefore, it is not uncommon that fashion brands and retailers “work more directly with SSA apparel manufacturers to ensure product quality, particularly for new or expanding product lines.”
  • Most SSA garment factories only have cut, make, and trim (CMT) capability and rely on imported textile materials arranged by fashion brands and retailers.
  • USITC found that US companies increasingly import man-made fiber (MMF) apparel from AGOA members to benefit from greater import duty savings. (note: US tariff rates for MMF apparel were typically higher than those made with natural fibers like cotton. On the other hand, however, it’s worth noting that SSA countries generally have more competitive advantages in producing cotton apparel products than in producing MMF apparel).
  • SSA countries also have advantages over their Asia competitors. For example, “a shipment takes about 15–18 days to travel from the port in Lomé to the East Coast of the United States. From China or Bangladesh, lead times range from 40–50 days.”
  • Many fashion brands “have expressed interest in sourcing from greenfield factories with fewer legacy challenges posed by compliance and environmental impacts.”
  • US fashion companies’ sourcing diversification strategy to avoid risk exposure also contributed to the expansion of their apparel imports from AGOA members.

Uncertainty of AGOA renewals hurt US apparel imports from SSA

  • Apparel companies typically make sourcing decisions 12–18 months in advance. This practice underscores the importance of renewing AGOA early rather than granting extensions only within two to nine months of expiration, as in the past.
  • The USITC report mentioned, “Without the assurance of the “third country fabric” provision, many US apparel companies sourced from AGOA beneficiaries reported holding back orders from the region.”

More can be done to leverage SSA’s cotton production better

  • Cotton growing is widespread across about thirty SSA countries. SSA accounts for about 7 percent of the world’s cotton production, the fifth-largest globally.
  • However, most SSA cotton is sold to international buyers and exported to Asian mills that process it into yarns and fabrics. In contrast, the consumption of domestic cotton in SSA is limited.
  • The SSA cotton industry produces high-quality, “sustainable” cotton that can be used in several high-value end products sold globally. However, because of a lack of mechanization, SSA cotton production struggles to increase supply to meet demand.
  • Also, cotton-growing regions in SSA tend to be poorer and less politically stable than other parts of the region.

Discussion questions:

  • Based on the blog post and class discussions, how competitive or attractive are AGOA members as apparel-sourcing destinations for US fashion companies, especially compared with suppliers from Asia and the Western Hemisphere?
  • Based on the blog post, what improvement can be made to make AGOA or any problems that need to be addressed?
  • Any other thoughts related to the patterns of apparel trade and sourcing based on the blog post?

2023 WITA Academy: Pathways To Opportunity – University of Delaware

The Washington International Trade Association (WITA) Academy, in partnership with UD’s Fashion and Apparel Studies Department, will host a virtual program exploring career opportunities in international affairs, business, fashion, apparel, and trade.

The program is split into two half-day sessions. Public sector trade-related careers will be examined on Friday, March 10, and private sector opportunities will be the focus on Monday, March 13. Both sessions will be held from 8:45 a.m. to 12:30 p.m. on Zoom.

This event is free and open to ALL UD students (undergraduate and graduate) and faculty, but registration is required (please use UD email address): https://www.wita.org/events/u-of-delaware-pathways/

Confirmed speakers include:

  • Sarah Clarke, former Chief Supply Chain Officer, PVH Corp.
  • Hun Quach, Director of Policy and Advocacy, Levi Strauss & Co.
  • Stephanie Lester, Vice President, Head of Government Affairs, Gap Inc.; former Professional Staff, House Ways and Means Committee, Subcommittee on Trade
  • Patty Lopez, Sr. Director- Vendor Management, Gap Inc.; former Sr Director-Global Production, Gap Inc.
  • Julia Hughes, President, U.S. Fashion Industry Association
  • Natalie Hanson, Deputy Assistant USTR for Textiles, Office of the U.S. Trade Representative
  • Jon Gold, Vice President of Supply Chain and Customs Policy, National Retail Federation
  • Nate Herman, Senior Vice President, American Apparel and Footwear Association (AAFA)
  • Bill McRaith, former Chief Supply Chain Officer, PVH Corp.
  • Heidi Colby-Oizumi, Chief Chemicals and Textiles Division, US International Trade Commission
  • Linda Martinich, Senior International Trade Specialist, Office of Textiles and Apparel, US Department of Commerce
  • Thomas Newberg, International Trade Specialist, Office of Textiles and Apparel, US Department of Commerce
  • Blake Harden, Vice President, International Trade at Retail Industry Leaders Association (RILA); former Trade Counsel, U.S. House of Representatives, Committee on Ways and Means, Subcommittee on Trade
  • Eric Biel, Senior Advisor, Fair Labor Association; Adjunct Professor, Georgetown University Law Center; former Associate Deputy Undersecretary, U.S. Department of Labor, Bureau of International Labor Affairs
  • Nicole Bivens Collinson, President, International Trade and Government Relations, Sandler, Travis & Rosenberg, P.A.; former Assistant Textile Negotiator, Office of the United States Trade Representative
  • Amanda Blunt, Counsel, Legal Affairs & Trade, General Motors; former Associate General Counsel, Office of the U.S. Trade Representative
  • Lisa Schroeter, Global Director of Trade and Investment Policy, Dow; former Executive Director, TransAtlantic Business Dialogue
  • Maria Luisa Boyce, Vice President, UPS Global Public Affairs; former Executive Director Office of Trade Relations/Senior Advisor for Trade Engagement, U.S. Customs and Border Protectionformer President, Border Trade Alliance
  • Brenda Smith, Global Director of Government Outreach, Expeditors; former Executive Assistant Commissioner, U.S. Customs & Border Protection
  • Nikole Burroughs, Deputy Chief of Staff for Management and Resources, USAID; former Staff Director, Subcommittee on Asia, the Pacific the Nonproliferation, United States House Committee on Foreign Affairs
  • Catherine DeFilippo, Director of Operations, United States International Trade Commission; former Economist, US International Trade Commission
  • Paul H. DeLaney, III, Partner, Kyle House Group; former Vice President for Trade and International at Business Roundtable, former International Trade Counsel to Chairman Orrin G. Hatch for the U.S. Senate Committee on Finance
  • Erin Ennis, Senior Director, Global Public Policy, Dell Technologies; former Assistant to the Deputy US Trade Representative, Office of the US Trade Representative
  • Naomi Freeman, Consultant, Sandler, Travis & Rosenberg; former Director for the Generalized System of Preferences at the Office of the U.S. Trade Representative
  • Nasim Fussell, Partner, Holland & Knight LLP; former Chief International Trade Counsel, U.S. Senate Committee on Finance
  • Ed Gresser, Vice President and Director, Trade and Global Markets at PPI; former Assistant U.S. Trade Representative for Trade Policy and Economics at the Office of the United States Trade Representative
  • Jodi Herman, Assistant Administrator for Legislative and Public Affairs, USAID; former Vice President for Government Relations and Public Affairs, National Endowment for Democracy (NED)
  • Charlotte Mcclure, Logistics Supervisor, Cap America; former Overseas Specialist, Cap America; former Logistics Specialist, Cap America

US Apparel Import and Sourcing Trends: Asia vs. Near-shoring from the Western Hemisphere (Updated February 2023)

Trend 1: US fashion companies continue to diversify their sourcing base in 2022

Numerous studies suggest that US fashion companies leverage sourcing diversification and sourcing from countries with large-scale production capacity in response to the shifting business environment. For example, according to the 2022 fashion industry benchmarking study from the US Fashion Industry Association (USFIA), more than half of surveyed US fashion brands and retailers (53%) reported sourcing apparel from over ten countries in 2022, compared with only 37% in 2021. Nearly 40% of respondents plan to source from even more countries and work with more suppliers over the next two years, up from only 17% in 2021.

Trade data confirms the trend. For example, the Herfindahl–Hirschman index (HHI), a commonly-used measurement of market concentration, went down from 0.110 in 2021 to 0.105 in 2022, suggesting that US apparel imports came from even more diverse sources.

Trend 2: Asia as a whole will remain the dominant source of imports

Measured in value, about 73.5% of US apparel imports came from Asia in 2022, up from 72.8% in 2021. Likewise, the CR5 index, measuring the total market shares of the top five suppliers—all Asia-based, i.e., China, Vietnam, Bangladesh, Indonesia, and India, went up from 60.6% in 2021 to 61.1% in 2022. Notably, the CR5 index without China (i.e., the total market shares of Vietnam, Bangladesh, Indonesia, India, and Cambodia) enjoyed even faster growth, from 40.7% in 2021 to 43.7% in 2022.

Additionally, facing growing market uncertainties and weakened consumer demand amid high inflation pressure, US fashion companies may continue to prioritize costs and flexibility in their vendor selection. Studies consistently show that Asia countries still enjoy notable advantages in both areas thanks to their highly integrated regional supply chain, production scale, and efficiency. Thus, US fashion companies are unlikely to reduce their exposure to Asia in the short to medium term despite some worries about the rising geopolitical risks.

Trend 3: US fashion companies’ China sourcing strategy continues to evolve

Several factors affected US apparel sourcing from China negatively in 2022:

  • One was China’s stringent zero-COVID policy, which led to severe supply chain disruptions, particularly during the fall. As a result, China’s market shares from September to November 2022 declined by 7-9 percentage points compared to the previous year over the same period.
  • The second factor was the implementation of the Uyghur Forced Labor Prevention Act (UFLPA) in June 2022, which discouraged US fashion companies from sourcing cotton products from China. For example, only about 10% of US cotton apparel came from China in the fourth quarter of 2022, down from 17% at the beginning of the year and much lower than nearly 27% back in 2018.
  • The third contributing factor was the US-China trade tensions, including the continuation of Section 301 punitive tariffs. Industry sources indicate that US fashion companies increasingly source from China for relatively higher-value-added items targeting the premium or luxury market segments to offset the additional sourcing costs.

Further, three trends are worth watching regarding China’s future as an apparel sourcing base for US fashion companies:

  • One is the emergence of the “Made in China for China” strategy, particularly for those companies that view China as a lucrative sales market. Recent studies show that many US fashion companies aim to tailor their product offerings further to meet Chinese consumers’ needs and preferences.
  • Second is Chinese textile and apparel companies’ growing efforts to invest and build factories overseas. As a result, more and more clothing labeled “Made in Bangladesh” and “Made in Vietnam” could be produced by factories owned by Chinese investors.
  • Third, China could accelerate its transition from exporting apparel to providing more textile raw materials to other apparel-exporting countries in Asia. Notably, over the past decade, most Asian apparel-exporting countries have become increasingly dependent on China’s textile raw material supply, from yarns and fabrics to various accessories. Moreover, recent regional trade agreements, particularly the Regional Comprehensive Economic Partnership (RCEP), provide new opportunities for supply chain integration in Asia.

Trend 4: US fashion companies demonstrate a new interest in expanding sourcing from the Western Hemisphere, but key bottlenecks need to be solved

Trade data suggests a mixed picture of near-shoring in 2022. For example, members of the Dominican Republic-Central America Free Trade Agreement (CAFTA-DR) and US-Mexico-Canada Trade Agreement (USMCA) accounted for a declining share of US apparel imports in 2022, measured in quantity and value. While CAFTA-DR and USMCA members showed an increase in their market share of US apparel imports in the fourth quarter of 2022, reaching 10.7% and 3.1%, respectively, this growth was not accompanied by an increase in trade volume. Instead, US apparel imports from these countries decreased by 11% and 15%, respectively, compared to the previous year. CAFTA-DR and USMCA members’ gain in market share was mainly due to a sharper decline in US apparel imports from the rest of the world (i.e., decreased by over 25% in the fourth quarter of 2022).

Trade data also suggests two other bottlenecks preventing more US apparel sourcing from CAFTA-DR and USMCA members. One is the lack of product diversity. For example, the product diversification index consistently shows that US apparel imports from CAFTA-DR members and Mexico concentrated on only a limited category of products, and the problem worsened in 2022. The result explained why US fashion companies often couldn’t move souring orders from Asia to CAFTA-DR and USMCA members.

Another problem is the underutilization of the trade agreement. For example, CAFTA-DR’s utilization rate for US apparel imports consistently went down from its peak of 87% in 2011 to only 74% in 2021. The utilization rate fell to 66.6% in 2022, the lowest since CAFTA-DR fully came into force in 2007. This means that as much as one-third of US apparel imports from CAFTA-DR did NOT claim the agreement’s preferential duty benefits. Thus, regarding how to practically grow US fashion companies’ near-shoring, we could expect more public discussions and debates in the new year.

by Sheng Lu

Further reading: Lu, Sheng (2023). Key trends to watch as US apparel imports hit record high in 2022 but slow in 2023. Just-Style.

Online event: Achieve More Sustainable and Socially Responsible Apparel Sourcing in the Post-Covid World: Fashion Companies’ Perspectives

Registration (Free)

February 14, 2023 (Tuesday), 12:00pm—1:00pm EST

Panelists:

  • Julia Hughes, President, United States Fashion Industry Association (USFIA)
  • Laurie Rando, Senior Director of Sustainable Products & Human Rights, Macy’s Inc.
  • Dr. Sheng Lu, Associate Professor of Fashion and Apparel Studies, University of Delaware

About the session:

This event, hosted by the United States Fashion Industry Association, is an official side session of the 2023 OECD Forum on Due Diligence in the Garment and Footwear Sector.

The session intends to facilitate constructive dialogue regarding the latest progress, challenges, and opportunities for achieving more sustainable and socially responsible apparel sourcing in the Post-COVID world. The session will offer a unique opportunity to hear directly from leading fashion brands and retailers regarding 1) fashion companies’ latest sourcing practices against the evolving business environment and their impacts on due diligence; 2) fashion companies’ new efforts and innovative projects to achieve more sustainable and socially responsible apparel sourcing; 3) opportunities and challenges to further improve sustainability and social responsibility in apparel sourcing in the post-COVID world. In addition, the session will be highly relevant and informative to all stakeholders in the fashion apparel business community, civil society, international organizations, academia, and policymakers.

An Inside Look at Textiles “Made in the USA”: FASH455 Exclusive Interview with Elizabeth Davelaar (UD&FASH MS17), Co-owner of Maker’s Way Fiber Mill

About Elizabeth Davelaar

Elizabeth Davelaar is a Co-Owner of Maker’s Way Fiber Mill in Brandon, SD, which opened in October 2021. The mill is a family-run business, with Elizabeth’s sister, Erin, and her mother, Kari, as other co-owners. Elizabeth began her career in the fashion industry at the University of Minnesota, where she graduated with a BS in Apparel Design from the College of Design. She then went to the University of Delaware, where she graduated with an MS in Fashion and Apparel Studies and a Graduate Certificate in Sustainable Apparel Business.

Elizabeth served as a project manager for a non-profit fashion brand in St. Louis and taught sewing to immigrant women in St. Louis and women in Ethiopia. She then moved to Vi Bella Jewelry in Sioux Center, IA, working her way from Shipping Manager to VP of Operations, Sustainability and Design. She then opened Maker’s Way Fiber Mill in 2021 with her family and has been working with local fiber producers to grow the yarn industry in South Dakota and surrounding areas.

Interview Part

Sheng: What inspired you to start your fiber mill business? What makes it special and exciting?

Elizabeth: The mill was born out of the need to solve a problem. I became interested in natural dye at the University of Delaware under Professor Cobb. Once I moved back to the area where I grew up, COVID hit, and I was able to dive deeper into the natural dye and use local plants as a dye source. This also led to being curious about local natural fibers. South Dakota isn’t a state that grows cotton, and the hemp industry is currently small, but it has an abundance of sheep. According to statistics from the US Department of Agriculture, South Dakota has 235,000 sheep and is home to one of the nation’s largest wool co-ops. However, there are only 2 working fiber mills in the area that provide custom processing, which makes yarn made from local fiber very hard to find.

This led to the opening of Maker’s Way Fiber Mill. We are a full-service, custom fiber mill and make yarn, felt, roving, and home goods products from primarily wool and alpaca fiber. Approximately 90% of our time is spent processing for clients who own the animals and use the yarn themselves or sell it, with the other 10% processing yarn that we sell online via our website and in-person at events. The vast majority of our customers are local (within 4-5 hrs) and sell locally to crafters. We take pride in knowing where the fiber we use comes from, sourcing from local farms or using fiber from vintage or second-hand sources.

Hats made from 80% alpaca/20% Wool (both sourced from SD) with a small amount of recycled sari silk blended in. Photo courtesy of Elizabeth Davelaar
(Photo courtesy of Elizabeth Davelaar)
Photo courtesy of Elizabeth Davelaar

Sheng: According to Maker’s Way Fiber Mill’s website, sustainability is a critical feature of your products. Why is that, and how do you make your products sustainable?

Elizabeth: We believe that we are stewards of the earth and should be conscious of how the products we make are grown, created, and then how they can be disposed of. The fashion industry, from creating the product to end life, is a huge polluter. The current market for wool is not great for producers, and there isn’t a good avenue for alpaca producers. We work very hard to ensure that our products are sourced from people that we know and trust or are from vintage or second-hand sources. We also work to ensure our products are made from natural fibers, thus they are biodegradable.

We also work to limit the waste in our mill. Although we try our absolute best to reduce loss in the process, each step produces some loss in fiber. This fiber is swept up and either rewashed and added to our Millie line or added to our bird nest starters. The Millie line is yarn spun up from the scraps, and we end up running about four batches of this a year. Each batch is unique because of the different blends of fiber we run. The bird nest starters use fiber that either falls out of our carder or is swept off the floor. These are then put outside in the spring for birds to use for nesting. The fibers are short enough that the baby birds don’t get tangled in them as they would with yarn and because they are natural animal fibers, the nests will biodegrade, unlike acrylic yarns that are sometimes used.

Photo courtesy of Elizabeth Davelaar

Sheng: Maker’s Way Fiber Mill’s products are 100% locally made in South Dakota. From your perspective, what are the opportunities and challenges for manufacturing textiles in the US today?

Elizabeth: I see two big challenges in the natural animal fiber side of the U.S. textile industry: Lack of consumer knowledge of where clothing comes from and lack of infrastructure. But both also present big opportunities!

First, we have found with our mill that people don’t have a good understanding of how many steps there are in creating yarn in general, let alone clothing. We have people who question our pricing because they don’t understand what it means to make yarn in the United States. From start to finish, it takes eight different steps to get raw fiber from producers to yarn ready to sell. Our consultations for new clients tend to be very educational because even fiber producers don’t necessarily know all the steps. As we open the mill for tours and talk to people at events, they start to understand and respect how much work is behind the yarn we create, and that is when we see buy-in – when people start to see the whole process, as well as the people.

The second challenge I see is the overall lack of infrastructure. We are one of approximately 200 small-scale / artisan-style mills in the country (this number is approximate – there is not a good database) and do not run near the quantity compared to the larger manufacturers. As of 2018, there aren’t any small-scale fiber mill equipment manufacturers in the US, so all of the equipment available to us is either used or has to be imported from Canada or Italy. Wait time for most small producers to get their fiber made into yarn is approximately 8-12 months at many mills, some run up to 18 months out. Our mill currently runs about 6 months out and we have been open for just over a year.

For producers who want to sell their wool to larger manufacturers and not have it custom processed, as far as our research has shown, there is one large-scale scouring (wool washing) facility in the states and most of the large-scale spinners use fiber from this facility to spin into yarn and then send the fiber off to other finishing companies for knitting. Otherwise, all of the wool is shipped overseas, and producers are earning approximately $1.66/lb of wool (in 2020). We have heard of many producers that have stockpiles of wool because they are waiting for higher wool prices. Coops also won’t accept wool that isn’t white, so all dark colors of wool get thrown away as there isn’t a market for it.

We also see this as an opportunity. We have noticed the “buying local” trend extending past food also to include yarn. People also see value in making their own clothing and being intentional through knitting/crocheting. There is a growing market for it. We have also seen some demand for the addition of another large-scale scouring facility that could meet the needs for wool insulation and other home applications.

Sheng: Like other fashion programs in the US, most of our FASH students take job opportunities from fashion brands and retailers, not necessarily textile mills. How to raise the young generation’s interest in pursuing a career in textile and apparel factories? Do you have any suggestions?

Elizabeth: I definitely never intended to start a fiber mill when I was in school. I only took one textile class and am pretty sure only one of my design projects used wool. UD was really what fed the sustainability bug in me and I started to realize that sustainability starts at the very beginning of the lifecycle of clothing. Whether or not something can be biodegradable, recyclable, or repurposed starts with what fiber makes up the clothing. UD also showed me how global apparel is and how much carbon footprint it makes.

Working in a fiber mill is not an easy job. It is dirty, we tend to put in long days, and we are constantly learning new things. I am a very hands-on person, and I love being able to create things from nothing, so this job is a great fit for me. The part I loved most about being in design school was being able to create things, and my current job is that all day, every day. We split the mill into “zones” and between myself, Erin and our mom, we all specialized in a specific part of the process. I am in charge of skirting and cleaning fleeces, which means cleaning off all of the hay and visibly dirty areas (aka manure) and then washing the fiber in 140-180 degree water to get the dirt and lanolin out of the fleece. I then pick and card the fiber, which opens up and organizes the fiber into a long tube that is then drafted, spun, plied, and put into skeins. While most days tend to include the same things, each day is never the same as the last. Each animal fleece we run acts differently, so we are always learning new and better ways to run the equipment we have. It is challenging but also a labor of love. Because we work directly with producers, we know the names of most of the animals and love knowing that their fleeces are being used instead of being discarded! We also love connecting with local people who love purchasing from local producers and makers.

Photo courtesy of Elizabeth Davelaar

One of the biggest things I believe fashion programs can do to help open up students to different options in the fashion industry is to expose them to different opportunities and allow them to follow whatever passion they have and emphasize that there isn’t a “right” path in the industry. My classes opened me up to labor issues around the world and that then led me to Delaware. And the opportunities I was given at UD to follow my passions are a huge reason I am doing what I am doing now. One of the things I think UD does right is having many different professors with varying backgrounds in the FASH department and I think other universities would do well to implement that too.

Sheng: Any other key issues or industry trends you will watch in 2023?

Elizabeth: One of the key trends we are watching is the local craft movements and knowing where your clothing comes from. We saw a crafting resurgence happen during COVID and people are still pickup up their knitting needles and crochet hooks to create items to wear and love. We also see some carryover of the local food scene into the local fiber scene. We believe that this will continue to grow!

–The END–

Explore Mango’s Apparel Sourcing Strategies (Updated January 2023)

About Mango

Mango is a fashion company based in Barcelona, Spain that was founded in 1984 by brothers Isak Andic and Nahman Andic. The company has grown significantly since its inception and now has over 2,700 stores in 109 countries worldwide. Mango is known for its trendy and high-quality clothing, which is targeted toward young women.

One of the critical factors in Mango’s success has been its ability to stay current and relevant in the fast-paced fashion world. The company regularly collaborates with top designers and influencers to create unique and fashionable collections that appeal to its target audience. Mango also closely monitors emerging trends and adapts its collections accordingly.

Besides clothing, Mango also offers accessories, such as bags, shoes, jewelry, and a home collection. The company has a solid online presence, with an e-commerce website that allows customers to shop from anywhere in the world.

In December 2022, Mango announced the Sustainable 2030 strategy, which “aims to move towards the full traceability and transparency of its value chain, in order to continue with the process of auditing its suppliers and ensuring that appropriate working conditions are being fulfilled for the workers in the factories the company works with around the world.” As part of the strategy, Mango will “focus its efforts on moving towards a more sustainable collection, prioritizing materials with a lower environmental impact and incorporating circular design criteria, so that by 2030 these will predominate in the design of its products and all its fibers will be of sustainable origin or recycled.”

Mango’s Apparel Sourcing Strategies (as of December 2022)

First, Mango adopted a sophisticated global sourcing network for its apparel products. Specifically, Mango’s apparel supply chain involves 1,878 Tier 1, Tier 2, and Tier 3 factories in 29 countries worldwide. About 31% of these factories produce garments (Tier 1), 19% supply fabrics (Tier 2), and 49% provide textile raw materials like yarns and accessories (Tier 3). Further, about 407 factories (or 21%) have vertical production capability (e.g., making both finished garments and textile inputs).

Second, like many EU fashion companies, near-shoring from the EU and Turkey is a critical feature of Mango’s apparel sourcing strategy. For example, about 44.8% of Mango’s Tier 1 garment suppliers were EU based (including Turkey), whereas Asia suppliers only accounted for 54%. Likewise, about 34% of Mango’s Tier 2 fabric suppliers and nearly half of its Tier 3 yarn and accessories suppliers were also EU based. The result reflects the EU’s intra-region textile and apparel trade patterns, supported by the region’s relatively complete textile and apparel supply chain. In comparison, US fashion companies typically source more than 80% of finished garments from Asia, and most of these garments also use Asia-based textile raw materials.

Third, measured by the number of suppliers, Mango’s top Tier 1 apparel production bases include Turkey (187 factories), China (176 factories), India (135 factories), and Italy (107 factories). Industry sources further indicated that between 2021 and 2022, Mango primarily sourced from Turkey and India for Tops (69% and 78%, respectively). Mango’s imports from China and Italy were more diverse in product categories (e.g., dresses, outwear, bottoms, and swimwear). On the other hand, Mango’s apparel imports from Italy were much higher priced ($107 retail price on average) than those from the other three countries ($38-41 retail price on average).

Fourth, the factory size and vertical production capabilities of Mango’s suppliers seem to vary by region. Notably, Mango’s Asia-based suppliers are more likely to be large-sized (with 1,000+ employees) and offer vertical production (e.g., making both finished garments and textile input). Mango’s Africa and America-based suppliers were relatively small-sized or lacked vertical integration.

By Sheng Lu

New Study: Explore U.S. Retailers’ Sourcing Strategies for Clothing Made from Recycled Textile Materials

Key findings:

This study was based on a statistical analysis of 3,307 randomly selected clothing items made from recycled textile materials for sale in the U.S. retail market between January 2019 and August 2022 (see the sample picture above). The results show that:

First, U.S. retailers sourced clothing made from recycled textile materials from diverse countries.

Specifically, the sampled clothing items came from as many as 36 countries, including developed and developing economies in Asia, America, the EU, and Africa.

However, reflecting the unique supply chain composition of clothing made from recycled textile materials, U.S. retailers’ sourcing patterns for such products turned out to be quite different from regular new clothing. For example, whereas the vast majority (i.e., over 90%) of U.S. regular new clothing came from developing countries as of 2022 (UNComtrade, 2022), as many as 43% of the sampled clothing items made from recycled textile materials (n=1,408) were sourced from developed countries. Likewise, U.S. retailers seemed to be less dependent on Asia when sourcing clothing made from recycled materials (41.9%, n=1,387) and instead used near-sourcing from America (30.1%, n=994) more often, particularly domestic sourcing from the United States (14.8%, n=490).

Second, U.S. retailers appeared to set differentiated assortments for products imported from developed and developing countries when sourcing clothing made from recycled textile materials.

Among the sampled clothing items made from recycled textile materials, those imported from developing countries, on average, included a broader assortment than developed economies. Likewise, imports from developing countries also concentrated on products relatively more complex to make as opposed to developed countries. Developing countries’ more extensive clothing production capability, including the available production facilities and skilled labor force, than developed economies could have contributed to the pattern.

On the other hand, likely caused by developed countries’ overall higher production costs, the average retail price of sampled clothing items sourced from developed countries was notably higher than those from developing ones. However, NO clear evidence shows that U.S. retailers used developed countries primarily as the sourcing bases for luxury or premium items and used developing countries only for items targeting the mass or value market. 

Third, an exporting country’s geographic location was another statistically significant factor affecting U.S. retailers’ sourcing pattern for clothing made from recycled textile materials. Specifically,

  • Imports from Asia had the most diverse product assortment (e.g., sizing options) and focused on complex product categories (e.g., outwear) that targeted mass and value markets.
  • Imports from America (North, South, and Central America) concentrated on simple product categories (e.g., T-shirts and hosiery) with moderate assortment diversity and mainly targeted the mass and value market.
  • Imports from the EU were mainly higher-priced luxury items in medium-sophisticated or sophisticated product categories with diverse assortment.
  • Imports from Africa concentrated on relatively higher-priced premium or luxury items in simple product categories (i.e., swim shorts) with a limited assortment diversity. 

The study’s findings demystified the country of origin of clothing made from recycled textile materials hidden behind macro trade statistics. The findings also created critical new knowledge that contributed to our understanding of the supply chain of clothing made from recycled textile materials and U.S. retailers’ distinct sourcing patterns and affecting factors for such products. The findings have several other important implications:

First, the study’s findings revealed the broad supply base for clothing made from recycled textile materials and suggested promising sourcing opportunities for such products. Whereas existing studies illustrated consumers’ increasing interest in shopping for clothing made from recycled textile materials, the study’s results indicated that the “enthusiasm” also applied to the supply side, with many countries already engaged in making and exporting such products. Meanwhile, the results showed that U.S. retailers sourced clothing made from recycled textile materials in different product categories with a broad price range targeting various market segments to meet consumers’ varying demands. Moreover, as textile recycling techniques continue to advance, potentially enriching the product offer of clothing made from recycled textile materials, U.S. retailers’ sourcing needs and supply base for such products could expand further.

Second, the study’s findings suggest that sourcing clothing made from recycled textile materials may help U.S. retailers achieve business benefits beyond the positive environmental impacts. For example, given the unique supply chain composition and production requirements, China appeared to play a less dominant role as a supplier of clothing made from recycled textile materials for U.S. retailers. Instead, a substantial portion of such products was “Made in the USA” or came from emerging sourcing destinations in America (e.g., El Salvador, Nicaragua) and Africa (e.g., Tunisia and Morocco). In other words, sourcing clothing made from recycled textile materials could help U.S. retailers with several goals they have been trying to achieve, such as reducing dependence on sourcing from China, expanding near sourcing, and diversifying their sourcing base.

Additionally, the study’s findings call for strengthening U.S. domestic apparel manufacturing capability to better serve retailers’ sourcing needs for clothing made from recycled textile materials. On the one hand, the results demonstrated U.S. retailers’ strong interest in sourcing clothing made from recycled textile materials that were “Made in the USA.” Also, the United States may enjoy certain competitive advantages in making such products, ranging from the abundant supply of recycled textile waste and the affordability of expensive modern recycling machinery to the advanced research and product development capability. On the other hand, the results showed that U.S. retailers primarily sourced simple product categories (e.g., T-shirts and hosiery), targeting the value and mass markets from the U.S. and other American countries. This pattern somewhat mirrored the production and sourcing pattern for regular new clothing, for which apparel “Made in the USA” also lacked product variety and focused on basic fashion items compared with Asian and EU suppliers. Thus, strengthening the U.S. domestic apparel production capacity, especially for those complex product categories (e.g., outwear and suits), could encourage more sourcing of “Made in the USA” apparel using recycled textile materials and support production and job creation in the U.S. apparel manufacturing sector.

by Sheng Lu

Full paper: Lu, S. (2023). Explore U.S. retailers’ sourcing strategies for clothing made from recycled textile materials. Sustainability, 15(1), 38.

Outlook 2023– Key Issues to Shape Apparel Sourcing and Trade

In December 2022, Just-Style consulted a panel of industry experts and scholars in its Outlook 2023–what’s next for apparel sourcing briefing. Below is my contribution to the report. All comments and suggestions are more than welcome!

2023 is likely another year full of challenges and opportunities for the global apparel industry.

First, the apparel industry may face a slowed world economy and weakened consumer demand in 2023. Apparel is a buyer-driven industry, meaning the sector’s volume of trade and production is highly sensitive to the macroeconomic environment. Amid hiking inflation, high energy costs, and retrenchment of global supply chains, leading international economic agencies, from the World Bank to the International Monetary Fund (IMF), unanimously predict a slowing economy worldwide in the new year. Likewise, the World Trade Organization (WTO) forecasts that the world merchandise trade will grow at around 1% in 2023, much lower than 3.5% in 2022. As estimated, the world apparel trade may marginally increase between 0.8% and 1.5% in the new year, the lowest since 2021. On the other hand, the falling demand may somewhat help reduce the rising sourcing cost pressure facing fashion companies in the new year.

Second, fashion brands and retailers will likely continue leveraging sourcing diversification and strengthening relationships with key vendors in response to the turbulent market environment. According to the 2022 fashion industry benchmarking study I conducted in collaboration with the US Fashion Industry Association (USFIA), nearly 40 percent of surveyed US fashion companies plan to “source from more countries and work with more suppliers” through 2024. Notably, “improving flexibility and reducing resourcing risks,” “reducing sourcing from China,” and “exploring near-sourcing opportunities” were among the top driving forces of fashion companies’ sourcing diversification strategies. Meanwhile, it is not common to see fashion companies optimize their supplier base and work with “fewer vendors.” For example, fashion companies increasingly prefer working with the so-called “super-vendors,” i.e., those suppliers with multiple-country manufacturing capability or can make textiles and apparel vertically, to achieve sourcing flexibility and agility. Hopefully, we could also see a more balanced supplier-importer relationship in the new year as more fashion companies recognize the value of “putting suppliers at the core.”

Third, improving sourcing sustainability and sourcing apparel products using sustainable textile materials will gain momentum in the new year. On the one hand, with growing expectations from stakeholders and pushed by new regulations, fashion companies will make additional efforts to develop a more sustainable, socially responsible, and transparent apparel supply chain. For example, more and more fashion brands and retailers have voluntarily begun releasing their supplier information to the public, such as factory names, locations, production functions, and compliance records. Also, new traceability technologies and closer collaboration with vendors enable fashion companies to understand their raw material suppliers much better than in the past. Notably, the rich supplier data will be new opportunities for fashion companies to optimize their existing supply chains and improve operational efficiency.

On the other hand, with consumers’ increasing interest in fashion sustainability and reducing the environmental impact of textile waste, fashion companies increasingly carry clothing made from recycled textile materials. My latest studies show that sourcing clothing made from recycled textile materials may help fashion companies achieve business benefits beyond the positive environmental impacts. For example, given the unique supply chain composition and production requirements, China appeared to play a less dominant role as a supplier of clothing made from recycled textile materials. Instead, in the US retail market, a substantial portion of such products was “Made in the USA” or came from emerging sourcing destinations in America (e.g., El Salvador, Nicaragua) and Africa (e.g., Tunisia and Morocco). In other words, sourcing clothing made from recycled textile materials could help fashion companies with several goals they have been trying to achieve, such as reducing dependence on sourcing from China, expanding near sourcing, and diversifying their sourcing base. Related, we are likely to see more public dialogue regarding how trade policy tools, such as preferential tariffs, may support fashion companies’ efforts to source more clothing using recycled or other eco-friendly textile materials.

Additionally, the debates on fashion companies’ China sourcing strategy and how to meaningfully expand near-sourcing could intensify in 2023. Regarding China, fashion companies’ top concerns and related public policy debates next year may include:

  • How to fully comply with the Uyghur Forced Labor Prevention Act (UFLPA) and reduce the forced labor risks in the supply chain?
  • What to do with Section 301 tariff actions against imports from China, including the tariff exclusion process?
  • How to reduce “China exposure” further in sourcing, especially regarding textile raw materials?
  • How should fashion companies respond and mitigate the business impacts of China’s shifting COVID policy and a new wave of COVID surge?
  • What contingency plan will be should the geopolitical tensions in the Asia-Pacific region directly affect shipping from the region?

Meanwhile, driven by various economic and non-economic factors, fashion companies will likely further explore ways to “bring the supply chain closer to home” in 2023. However, the near-shoring discussion will become ever more technical and detailed. For example, to expand near-shoring from the Western Hemisphere, more attention will be given to the impact of existing free trade agreements and their specific mechanisms (e.g., short supply in CAFTA-DR) on fashion companies’ sourcing practices. Even though we may not see many conventional free trade agreements newly launched, 2023 will be another busy year for textile and apparel trade policy deliberation, especially behind the scene and on exciting new topics.

By Sheng Lu

Discussion question: As we approach the middle of the year, why do you agree or disagree with any predictions in the outlook? Please share your thoughts.

Video Discussion: Textile Manufacturing in America, post-globalisation

Discussion questions:

#1. Are classic trade theories (e.g., comparative advantage) still relevant or outdated in the 21st century? Why? Please share your thoughts based on the video and the figures.

#2. Based on the video and the figures above, is the US textile manufacturing sector a winner or loser of globalization and international trade? Why?

#3. Take the following poll (anonymous) and share your reflections.

#4. Should the government’s trade policy consider non-economic factors such as national security and geopolitics? What should be the line between promoting “fair trade” and “trade protectionism”? What’s your view?

#5. Is there anything else you find interesting/intriguing/thought-provoking in the video? Why?

[The discussion is closed for this post]

US-China Tariff War and Apparel Sourcing: A Four-Year Review (updated December 2022)

On September 2, 2022, the Office of the US Trade Representative (USTR) announced it would continue the billions of dollars of Section 301 punitive tariffs against Chinese products. USTR said it made the decision based on requests from domestic businesses benefiting from the tariff action. As a legal requirement, USTR will launch a full review of Section 301 tariff action in the coming months.

In her remarks at the Carnegie Endowment for International Peace on Sep 7, 2022, US Trade Representative Katharine Tai further said that the Section 301 punitive tariffs on Chinese imports “will not come down until Beijing adopts more market-oriented trade and economic principles.” In other words, the US-China tariff war, which broke out four years ago, is not ending anytime soon.

A Brief History of the US Section 301 tariff action against China

The US-China tariff war broke out as both unexpected and not too surprising. For decades, the US government had been criticizing China for its unfair trade practices, such as providing controversial subsidies to state-owned enterprises (SMEs), insufficient protection of intellectual property rights, and forcing foreign companies to transfer critical technologies to their Chinese competitors. The US side had also tried various ways to address the problems, from holding bilateral trade negotiations with China and imposing import restrictions on specific Chinese goods to suing China at the World Trade Organization (WTO). However, despite these efforts, most US concerns about China’s “unfair” trade practices remain unsolved.

When former US President Donald Trump took office, he was particularly upset about the massive and growing US trade deficits with China, which hit a record high of $383 billion in 2017. In alignment with the mercantilism view on trade, President Trump believed that the vast trade deficit with China hurt the US economy and undermined his political base, particularly with the working class.

On August 14, 2017, President Trump directed the Office of the US Trade Representative (USTR) to probe into China’s trade practices and see if they warranted retaliatory actions under the US trade law. While the investigation was ongoing, the Trump administration also held several trade negotiations with China, pushing the Chinese side to purchase more US goods and reduce the bilateral trade imbalances. However, the talks resulted in little progress.

President Trump lost his patience with China in the summer of 2018. In the following months, citing the USTR Section 301 investigation findings, the Trump administration announced imposing a series of punitive tariffs on nearly half of US imports from China, or approximately $250 billion in total. As a result, for more than 1,000 types of products, US companies importing them from China would have to pay the regular import duties plus a 10%-25% additional import tax. However, the Trump administration’s trade team purposefully excluded consumer products such as clothing and shoes from the tariff actions. The last thing President Trump wanted was US consumers, especially his political base, complaining about the rising price tag when shopping for necessities. The timing was also a sensitive factor—the 2018 congressional mid-term election was only a few months away.

President Trump hoped his unprecedented large-scale punitive tariffs would change China’s behaviors on trade. It partially worked. As the trade frictions threatened economic growth, the Chinese government returned to the negotiation table. Specifically, the US side wanted China to purchase more US goods, reduce the bilateral trade imbalances and alter its “unfair” trade practices. In contrast, the Chinese asked the US to hold the Section 301 tariff action immediately.

However, the trade talks didn’t progress as fast as Trump had hoped. Even worse, having to please domestic forces that demanded a more assertive stance toward the US, the Chinese government decided to impose retaliatory tariffs against approximately $250 billion US products. President Trump felt he had to do something in response to China’s new action. In August 2019, he suddenly announced imposing Section 301 tariffs on a new batch of Chinese products, totaling nearly $300 billion. As almost everything from China was targeted, apparel products were no longer immune to the tariff war. With the new tariff announcement coming at short notice, US fashion brands and retailers were unprepared for the abrupt escalation since they typically placed their sourcing orders 3-6 months before the selling season.

Nevertheless, Trump’s new Section 301 actions somehow accelerated the trade negotiation. The two sides finally reached a so-called “phase one” trade agreement in about two months. As part of the deal, China agreed to increase its purchase of US goods and services by at least $200 billion over two years, or almost double the 2017 baseline levels. Also, China promised to address US concerns about intellectual property rights protection, illegal subsidies, and forced technology transfers. Meanwhile, the US side somewhat agreed to trim the Section 301 tariff action but rejected removing them. For example, the punitive Section 301 tariffs on apparel products were cut from 15% to 7.5% since implementing the “phase one” trade deal.

Trump lost the 2020 presidential election, and Joe Biden was sworn in as the new US president on January 20, 2021. However, the Section 301 tariff actions and the US-China “phase one” trade deal stayed in force. 

Debate on the impact of the US-China tariff war

Like many other trade policies, the US Section 301 tariff actions against China raised heated debate among stakeholders with competing interests. This was the case even among different US textile and apparel industry segments.

On the one hand, US fashion brands and retailers strongly oppose the punitive tariffs against Chinese products for several reasons:

First, despite the Section 301 tariff action, China remained a critical apparel sourcing base for many US fashion companies with no practical alternative. Trade statistics show that four years into the tariff war, China still accounted for nearly 40 percent of US apparel imports in quantity and about one-third in value as of 2021. According to the latest data, in the first ten months of 2022, China remained the top apparel supplier, accounting for 35% of US apparel imports in quantity and 22.2% in value. Studies also consistently find that US fashion companies rely on China to fulfill orders requiring a small minimum order quantity, flexibility, and a great variety of product assortment.

Second, having to import from China, fashion companies argued that the Section 301 punitive tariffs increased their sourcing costs and cut profit margins. For example, for a clothing item with an original wholesale price of around $7, imposing a 7.5% Section 301 punitive tariff would increase the sourcing cost by about 5.8%. Should fashion companies not pass the cost increase to consumers, their retail gross margin would be cut by 1.5 percentage points. Notably, according to the US Fashion Industry Association’s 2021 benchmarking survey, nearly 90 percent of respondents explicitly say the tariff war directly increased their company’s sourcing costs. Another 74 percent say the tariff war hurt their company’s financials.

Third, as companies began to move their sourcing orders from China to other Asian countries like Vietnam, Bangladesh, and Cambodia to avoid paying punitive tariffs, these countries’ production costs all went up because of the limited production capacity. In other words, sourcing from everywhere became more expensive because of the Section 301 action against China. 

Further, it is important to recognize that fashion companies supported the US government’s efforts to address China’s “unfair” trade practices, such as subsidies, intellectual property rights violations, and forced technology transfers. Many US fashion companies were the victims of such practices. However, fashion companies did not think the punitive tariff was the right tool to address these problems effectively. Instead, fashion brands and retailers were concerned that the tariff war unnecessarily created an uncertain and volatile market environment harmful to their business operations.

On the other hand, the National Council of Textile Organizations (NCTO), representing manufacturers of fibers, yarns, and fabrics in the United States, strongly supported the Section 301 tariff actions against Chinese products. As most US apparel production had moved overseas, exporting to the Western Hemisphere became critical to the survival of the US textile industry. Thus, for years, NCTO pushed US policymakers to support the so-called Western Hemisphere textile and apparel supply chain, i.e., Mexico and Central American countries import textiles from the US and then export the finished garments for consumption. Similarly, NCTO argued that Section 301 tariff action would make apparel “Made in China” less price competitive, resulting in more near sourcing from the Western Hemisphere.

However, interestingly enough, while supporting the Section 301 action against finished garments “Made in China,” NCTO asked the US government NOT to impose punitive tariffs on Chinese intermediaries. As NCTO’s president testified at a public hearing about the Section 301 tariff action in 2019,

“While NCTO members support the inclusion of finished products in Section 301, we are seriously concerned that…adding tariffs on imports of manufacturing inputs that are not made in the US such as certain chemicals, dyes, machinery, and rayon staple fiber in effect raises the cost for American companies and makes them less competitive with China.”

Mitigate the impact of the tariff war: Fashion Companies’ Strategies

Almost four years into the trade war, US fashion companies attempted to mitigate the negative impacts of the Section 301 tariff action. Notably, US apparel retailers were cautious about raising the retail price because of the intense market competition. Instead, most US fashion companies chose to absorb or control the rising sourcing cost; however, no strategy alone has proven remarkably successful and sufficient.

The first approach was to switch to China’s alternatives. Trade statistics suggest that Asian countries such as Vietnam and Bangladesh picked up most of China’s lost market shares in the US apparel import market. For example, in 2022 (Jan-Nov), Asian countries excluding China accounted for 51.2% of US apparel imports, a substantial increase from 41.2% in 2018 before the tariff war. In comparison, about 16.4% of U.S. apparel imports came from the Western Hemisphere in 2021 (Jan-Nov), lower than 17.0% in 2018. In other words, no evidence shows that Section 301 tariffs have expanded U.S. apparel sourcing from the Western Hemisphere.

The second approach was to adjust what to source from China by leveraging the country’s production capacity and flexibility. For example, market data from industry sources showed that since the Section 301 tariff action, US fashion companies had imported more “Made in China” apparel in the luxury and premium segments and less for the value and mass markets. Such a practice made sense as consumers shopping for premium-priced apparel items typically were less price-sensitive, allowing fashion companies to raise the selling price more easily to mitigate the increasing sourcing costs. Studies also found that US companies sourced fewer lower value-added basic fashion items (such as tops and underwear), but more sophisticated and higher value-added apparel categories (such as dresses and outerwear) from China since the tariff war.

China is no longer treated as a sourcing base for low-end cheap product
More apparel sourced from China target the premium and luxuary market segments

Related, US fashion companies such as Columbia Sportswear leveraged the so-called “tariff engineering” in response to the tariff war. Tariff engineering refers to designing clothing to be classified at a lower tariff rate. For example, “women’s or girls’ blouses, shirts, and shirt-blouses of man-made fibers” imported from China can tax as high as 26.9%. However, the same blouse added a pocket or two below the waist would instead be classified as a different product and subject to only a 16.0% tariff rate. Nevertheless, using tariff engineering requires substantial financial and human resources, which often were beyond the affordability of small and medium-sized fashion companies.

Third, recognizing the negative impacts of Section 301 on US businesses and consumers, the Office of the US Trade Representative (USTR) created a so-called “Section 301 exclusion process.” Under this mechanism, companies could request that a particular product be excluded from the Section 301 tariffs, subject to specific criteria determined at the discretion of USTR. The petition for the product exclusion required substantial paperwork, however. Even companies with an in-house legal team typically hire a DC-based law firm experienced with international trade litigation to assist the petition, given the professional knowledge and a strong government relation needed. Also of concern to fashion companies was the low success rate of the petition. The record showed that nearly 90 percent of petitions were denied for failure to demonstrate “severe economic harm.” Eventually, since the launch of the exclusion process, fewer than 1% of apparel items subject to the Section 301 punitive tariff were exempted. Understandably, the extra financial burden and the long shot discouraged fashion companies, especially small and medium-sized, from taking advantage of the exclusion process.

In conclusion, with USTR’s latest announcement, the debate on Section 301 and the outlook of China as a textile and apparel sourcing base will continue. Notably, while economic factors matter, we shall not ignore the impact of non-economic factors on the fate of the Section 301 tariff action against China. For example, with the implementation of the Uyghur Forced Labor Prevention Act (UFLPA), only about 10% of US cotton apparel imports came from China in the first ten months of 2022 (latest data available), the lowest in a decade.  As the overall US-China bilateral trade relationship significantly deteriorated in recent years and the friction between the two countries expanded into highly politically sensitive areas, the Biden administration could “willfully” choose to keep the Section 301 tariff as negotiation leverage. Domestically, President Biden also didn’t want to look “weak” on his China policy, given the bipartisan support for taking on China’s rise.

by Sheng Lu

Suggested citation: Lu, S. (2022). US-China Tariff War and Apparel Sourcing: A Four-Year Review. FASH455 global apparel and textile trade and sourcing. https://shenglufashion.com/2022/09/10/us-china-tariff-war-and-apparel-sourcing-a-four-year-review/

WTO Reports World Textiles and Clothing Trade in 2021

[The updated World Textiles and Clothing Trade in 2022 is available]

This article provided a comprehensive review of the world textiles and clothing trade patterns in 2021 based on the newly released data from the World Trade Statistical Review 2022 and the United Nations (UNComtrade). Affected by the ongoing pandemic and companies’ evolving production and sourcing strategies in response to the shifting business environment, the world textiles and clothing trade patterns in 2021 included both continuities and new trends. Specifically:

Pattern #1: As the world economy recovered from COVID, the world clothing export boomed in 2021, while the world textile exports grew much slower due to a high trade volume the year before. Specifically, thanks to consumers’ strong demand, world clothing exports in 2021 fully bounced back to the pre-COVID level and exceeded $548.8bn, a substantial increase of 21.9% from 2020. The apparel sector is not alone. With economic activities mostly resumed, the world merchandise trade in 2021 also jumped 26.5% from a year ago, the fastest growth in decades.

In comparison, the value of world textiles exports grew slower at 7.8% in 2021 (i.e., reached $354.2bn), lagging behind most sectors. However, such a pattern was understandable as the textile trade maintained a high level in 2020, driven by high demand for personal protective equipment (PPE) during the pandemic.

Nevertheless, the world textiles and clothing trade could face strong headwinds down the road due to a slowing world economy and consumers’ weakened demand.  Notably, amid hiking inflation, high energy costs, and retrenchment of global supply chains, leading international economic agencies, from the World Bank to the International Monetary Fund (IMF), unanimously predict a slowing economy worldwide. Likewise, the World Trade Organization (WTO) forecasts that the growth of world merchandise trade will be cut to 3.5% in 2022 and down further to only 1% in 2023. As a result, the world textiles and clothing trade will likely struggle with stagnant growth or a modest decline over the next two years.

Pattern #2: COVID did NOT fundamentally shift the competitive landscape of textile exports but affected the export product structure. Meanwhile, some long-term structural changes in world textile exports continued in 2021.

Specifically, China, the European Union (EU), and India remained the world’s three largest textile exporters in 2021, a pattern that has stayed stable for over a decade. Together, these top three accounted for 68% of the world’s textile exports in 2021, similar to 66.9% before the pandemic (2018-2019). Other textile exporters that made it to the top ten list in 2021 were also the same as a year ago and before the pandemic (2018-2019).

Meanwhile, the growth rate of the top ten textile exporters varied significantly in 2021, ranging from -5.5% (China) to 47.8% (India). The demand shift from PPE to apparel-related yarns and fabrics was a critical contributing factor behind the phenomenon. For example, China’s PPE-related textile exports decreased by more than $33bn (or down 43%) in 2021. In contrast, the world knit fabric exports (SITC code 655) surged by more than 30% in 2021, led by India (up 74%) and Pakistan (up 72%). Nevertheless, as consumers’ lifestyles almost reached a “new normal,” we could expect the textile export product structure to stabilize soon.

On the other hand, as a trend already emerged before the pandemic, middle-income developing countries continued to play a more significant role in textile exports, whereas developed countries lost market shares. For example, the United States, Germany, and Italy led the world’s textile exports in the 2000s, accounting for more than 20% of the market shares. However, these three countries’ shares fell to 12.8% in 2019 and hit a new low of 11.3% in 2021. In comparison, middle-income developing countries like China, Vietnam, Turkey, and India have entered the development stage of expanding textile manufacturing. As a result, their market share in the world’s textile exports rose steadily. These countries also achieved a more balanced textiles/clothing export ratio over the years, meaning more textile raw materials like yarns and fabrics can be locally produced instead of relying on imports. For example, Vietnam, known for its competitive clothing products, achieved a new high of $11.5bn in textile exports in 2021 and ranked sixth globally. Vietnam’s textiles/clothing ratio also doubled from 0.15 in 2005 to 0.37 in 2021. It is not unlikely that Vietnam’s textile exports may surpass the United States over the next few years.

Pattern #3: Countries with large-scale production capacity stood out in world clothing exports in 2021. Meanwhile, clothing exporters compete to become China’s alternatives, but there seems to be no clear winner yet.

Consumers’ surging demand and COVID-related supply chain disruptions significantly impacted the world’s clothing export patterns in 2021. As fashion brands and retailers were eager to find sourcing capacity, countries with large-scale production capacity and relatively stable supply enjoyed the fastest growth in clothing exports. For example, except for Vietnam, which suffered several months of COVID lockdowns, all other top five clothing exporters enjoyed a more than 20% growth of their exports in 2021, such as China (up 24%), Bangladesh (up 30%), Turkey (up 22%), and India (up 24%).

As another critical trend, many international fashion brands and retailers have been trying to reduce their apparel sourcing from China, driven by various economic and non-economic factors, from cost considerations and trade tensions to geopolitics. Notably, despite its strong performance in 2021, China accounted for only 23.1% of US apparel imports in 2022 (January to September), much lower than 36.2% in 2015. Likewise, China’s market shares in the EU, Japanese, and Canadian clothing import markets also fell over the same period, suggesting this was a worldwide phenomenon.  

With reduced apparel sourcing from China, fashion companies have actively sought alternative sourcing destinations, but the latest trade data suggests no clear winner yet. For example, Vietnam and Bangladesh, the two most popular candidates for “Next China,” accounted for 6.5% and 5.7% shares in the world’s clothing export in 2021, still far behind China (32.1%). Interestingly, from 2015 to 2021, the world’s top four largest clothing exporters next to China (i.e., Bangladesh, Vietnam, Turkey, and India) did not substantially gain new market shares. Instead, China’s lost market was filled by “the rest of the world.”

Additionally, recent studies show that many fashion companies have switched back to the sourcing diversification strategy in 2022 as managing risks and improving sourcing flexibility become more urgent priorities. In other words, the world’s clothing export market could turn more “crowded” and competitive in the coming years.

Pattern #4: Regional supply chains remain critical features of the world textiles and clothing trade. Several factors support and shape the regional textiles and clothing trade patterns. First, as clothing production often needs to be close to where textile materials are available, many developing clothing-producing countries rely heavily on imported textile materials, primarily from more advanced economies in the same region. Second, through lowered trade barriers, regional free trade agreements also financially encouraged garment producers, particularly in Asia, the EU, and Western Hemisphere (WH), to use locally or regionally made textile materials. Further, fashion companies’ interest in “near-shoring” supported the regional supply chain, and related textiles and clothing trade flows between neighboring countries.

The latest trade data indicated that Asia’s regional textiles and clothing trade patterns strengthened further despite supply chain chaos during the pandemic. Specifically, in 2021, as many as 82% of Asian countries’ textile imports came from within Asia, up from 80% in 2015. China, in particular, has played a more prominent role as a leading textile supplier for other Asian clothing-exporting countries. For example, more than 60% of Vietnam’s textile imports came from China in 2021, a substantial increase from 23% in 2005. The same pattern applied to Pakistan, Cambodia, Bangladesh, and the Association of Southeast Asian Nations (ASEAN) members.

In January 2022, the Regional Comprehensive Economic Partnership (RCEP), a mega free trade agreement involving all major economies in Asia, entered into force. The tariff cut and very liberal rules of origin of the agreement will hopefully drive Asia’s booming regional textiles and clothing trade and further deepen its regional economic integration.

Besides Asia, the regional textiles and clothing trade pattern in the EU (or the so-called Intra-EU trade) was also in good shape. In 2021, 50.8% of EU countries’ textile imports and 37% of clothing imports came from other EU members. This pattern has changed little over the past decade, thanks to many EU countries’ commitment to maintaining local textiles and clothing production rather than outsourcing.

In comparison, the Western Hemisphere (WH) textile and apparel supply chain (e.g., clothing made in Mexico or Central America using US or regionally made textiles) seemed to struggle in recent years. As of 2021, only 20% of WH countries’ textile imports came from within WH, down from 26% in 2015. Likewise, WH countries (mainly the US and Canada) just imported 14.6% of clothing from WH in 2021, down from 15.3% in 2015 and much lower than their EU counterparts (37% in 2021). It will be interesting to see whether US and Canadian fashion companies’ expressed interest in expanding near-shoring may reverse the course.

Furthermore, the regional textiles and clothing trade patterns in Sub-Saharan Africa (SSA) are also worth watching. Compared with Asia and the EU, SSA clothing producers used much fewer locally-made textiles (i.e., stagnant at around 11% only from 2011 to 2021), reflecting the region’s lack of textile manufacturing capability. Most trade programs with SSA countries, such as the US-led African Growth and Opportunity Act (AGOA) and EU’s Everything But Arms (EBA) program, adopt liberal rules of origin for clothing products, allowing third-party textile input to be used. It can be studied whether such liberal rules of origin somehow disincentivize building SSA’s own textile manufacturing sector or are still essential given the reality of SSA’s limited textile production capacity.

By Sheng Lu

Suggested citation: Lu, Sheng (2022). World Textiles and Clothing Trade in 2021: A Statistical Review. Just-Style. Retrieved from https://www.just-style.com/analysis/world-textiles-and-clothing-trade-in-2021-a-statistical-review/