China’s market share continuing to decline in US

Just a month before Trump administration’s latest round of 15% tariffs imposition on $112 billion of Chinese goods, USA companies imported $14.47 billion worth of apparels from China, the still-top supplier in the year through July.

That is a 2.33% increase compared to a year earlier, according to the US Commerce Department’s Office of Textiles & Apparel’s (OTEXA) new data released on September 4, Wednesday.

Though it is an increase, the analysts are considering it as tepid gains compared to last year as the U.S.-China trade war has influenced importers to diversify their sourcing to avoid risk and now higher prices.

China held a 32.26% market share in of U.S. apparel imports in value terms for the 12 months through July, an erosion of 3.6% in three and a half years, according to OTEXA. For the year through July 2018, China’s apparel market of U.S. apparel imports was 33.1%, compared to 33.7% for the year ended Dec. 31, 2017. Looking even further back, China’s market share at the end of 2016 was 34.59%, and 35.86% a year before that.

The statement of Manny Chirico, Chairman and CEO of PVH Corp. is more alarming than the statistics. He said to Sourcing Journal last week, “Moving into 2020, we have significantly moved a lot of our production where we could out of the China market. Next year, we will be somewhere between 10 to 12% of our U.S.-required production coming out of China,” down from 34.59% just three years ago.

The scenario is going in favor of China’s Asian neighbors. The slow decline and flight from the country has enabled them to gain ground. For the year to date through July, shipments from no. 2 supplier Vietnam rose 13.05% to a value of $7.8 billion, while imports from third-place Bangladesh increased 11.53% to $3.57 billion.