Global Manufacturing Trade

Global Apparel Price hike

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The US-China trade war has hit the Chinese clothing and textile export sector massively.

Under the Trump Administration, a trade war has been witnessed against China in the name of correcting economic and societal imbalances created by the WTO system of free trade. China countered US tariffs with higher tariffs of its own, in a race where both sides struggle to penalize each other. The cost of apparel sold to American importers from countries other than China has also risen

The US-China trade war has hit the Chinese clothing and textile export sector massively. But companies that have invested in manufacturing sites outside China have been better protected, Over the past years, the ensuing trade war raised import tariffs on exports from both countries to levels not seen in decades and in doing so, set off a series of events that have not been entirely predictable. And here we are today, an essential pillar of globalization, significantly weakened, subject to unforeseen market forces and psychological uncertainty.

Uncertainties around Brexit are also causing mounting anxieties for UK brands and retailers, who fear their sourcing costs will go up – especially in the case of a no-deal Brexit – and that it will be more difficult to access raw materials and workers, as well as move products across UK/EU borders. A number of fashion firms and ocean carriers are taking a stand against the potential opening up of trans-Arctic shipping.

Clothing and footwear brands and retailers have “dramatically” improved transparency in their supply chains, a new report has found, but suggests more can be done – including the introduction of legislation and going beyond tier-1 suppliers. The basic garment cost sheet is a breakdown of costs for each material and step.

But retailers and brand customers do not care about supplier costs – and the factories have nothing to learn from them. Fashion retailer H&M Group is partnering with the International Organization for Migration (IOM) to ensure ethical recruitment and protection of migrant workers in global supply chains.

Many Chinese textile and apparel producers have been priced out of the market, while Chinese imports of US agricultural products such as cotton have suffered in turn.

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