How current trade policies affect the fashion industry
Four leading authorities on trade discussed the current USA trade policies at this Texworld seminar. Here are their paraphrased comments.
Julia Huges – President, US Fashion Industry Association
Most Democrats recognize the problems being caused with agriculture and manufacturing. If a Democrat is elected we will still be dealing with problems with the rise of China. China will surpass the USA in global competition. If Trump is elected [she thinks] tariffs will be expanded to other countries.
What do we mean by sustainability? There are a thousand ways to talk about sustainability. The World Trade Organization has lost it way because the USA is no longer involved. We need a group to bring people together to make good decisions to prevent problems and trade wars.
Small and medium companies are getting hurt because the changes are harder to bear.
From the US Fashion Industry Association website: USFIA represents brands, retailers, importers, and wholesalers based in the United States and doing business globally. Founded in 1989, USFIA works to eliminate tariff and non-tariff barriers that impede the fashion industry’s ability to trade freely and create jobs in the United States.
Mark Engebretson, Executive Vice President, Vince.com
Mark Engebretson – Executive Vice President, Vince.com
The only purpose for tariffs now is to stir things up. The USA is importing less. Shipping and logistics costs are the biggest rises in costs. Costs get moved to the consumers.
[There are] higher tariffs for silk and cashmere form China. One needs to follow one’s company’s needs. [The] Primary focus needs to be on the product. Trade is security. I worry about some of the progress out there that we are no longer a part of.We make too much stuff. Much is discarded. We need a closer look at compliance. How do we become responsible?
See where you want to be in a year. Consider three relationships: price, quality, delivery Achieve two of the three.
From website http://investors.vince.com/about/overview/default.aspx: Established in 2002, Vince is leading global luxury apparel and accessories brand best known for creating elevated yet understated pieces for every day. The collections are inspired by the brand’s California origins and embody a feeling of warm and effortless style. Vince designs uncomplicated yet refined pieces that approach dressing with a sense of ease. Known for its range of luxury products, Vince offers women’s and men’s ready-to-wear, shoes, handbags, and home for a global lifestyle. Vince products are sold in prestige locations worldwide. As of November 14, 2018, the Company operated 45 full-price retail stores, 14 outlet stores and its e-commerce site, vince.com. The Company is headquartered in New York and operates a design studio in Los Angeles.
Dr. Sheng Lu, Assoc. Professor, University of Delaware
Sheng Lu, Ph.D. Associate Professor, Department of Fashion and Apparel Studies, University of Delaware
Courses regularly taught: Global apparel and textile trade and sourcing, Socially responsible apparel and global policy
Globalization has three areas: economic growth, lower trade, advancement of technology. There are winners and losers. We need more education about globalization. Trade policies are evolving. Safety, labor standards, environment standards, technical, enforcement are all positive changes.
Section 301 has accelerated the trade wars. 25% now sourcing more from Vietnam than China. China textiles are expanding to other Asian countries.
Dr. Lu gave this information at the seminar. It was captured from Dr. Lu’s blog:
Impact of the U.S.-China tariff war on sourcing:
• The trade diversion effect of Section 301 has accelerated U.S. fashion companies’ pace of reducing sourcing from China. About 83 percent of respondents expect to decrease sourcing from China over the next two years, up further from 67 percent in 2018.
• The Section 301 action is pushing up the price of U.S. apparel imports across the board, making “increasing production and sourcing cost” the top business challenge for respondents in 2019. As much as 63 percent of respondents explicitly say the U.S. Section 301 tariff action against China “increased my companies’ sourcing cost” in 2019. As companies are moving sourcing orders to Bangladesh, Vietnam, and India, the average price of U.S. apparel imports from these countries – the main alternatives to China — have all gone up by more than 20 percent in 2019 (January-May) year on year.
Moderator, Robert Antoshak, Managing Director, OLAH, Inc.
Robert Antoshak– Moderator, Managing Director, OLAH, Inc. writes for Just Style
We may have hit peak globalization.
From the Olah Inc. website: Ohah, Inc. is a multi-faceted New York-based marketing, consultancy and event firm focusing on the denim and sportswear industries
Olah Inc. helps foreign companies develop their fiber, textile and apparel sales in the USA. We specialize in helping companies maximize and refine their Marketing. Product Development & Technical Production + Supply Chain Management.
More about the Worldtex Show will be posted next week.
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2 Comments. Leave new
Great insight. Very sad to know we have outsourced so much to other countries and don’t see any attempt to help the industry bring these productions back to the U.S. This affects fabrics as well as clothing. I love buying great fabrics, but I sure don’t want to have to no choice but to buy fabrics from other countries, esp. China. Thanks for sharing. Jnetti
It’s all about money, Jeannette. But some industry is moving back. It seems that China is very interested in buying high-end clothing from the USA.