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Vietnam is speeding up its market share, and China is no longer the largest clothing exporter of the United States

Seven months ago, China was still the largest supplier of American fashion companies, but its significant advantage over Vietnam has disappeared due to the decoupling between the coronavirus and the world's two major economies.

According to the U.S. Department of Commerce: in terms of value, the clothing imported by the United States from China has dropped from nearly 30% in 2019 to 20% in the first half of 2020. In Southeast Asian countries, its market share has increased from 16% in the same period to now, which is equivalent to Vietnam.

With Vietnam seizing market share, China is no longer the largest exporter of clothing to the United States

The weakening of China's position in the U.S. fashion supply chain is partly a reflection of growing tensions as US fashion companies are forced to reduce contact with Chinese suppliers in response to the trade war, the coronavirus pandemic and deteriorating bilateral relations.

A survey of 25 executives of leading fashion companies conducted by the American fashion industry association in the second quarter found that although most of the goods were imported from many countries, including China and Vietnam, 29% of the respondents said they bought more goods from Vietnam than from China, compared with 25% last year.

According to data released this week by the office of textiles and apparel, the US Department of Commerce, at least 30 per cent of US apparel imports in the first half of this year came from China in terms of volume.

But crucially, the percentage is well below average, as most Chinese manufacturers and traders have slashed prices to maintain overseas orders and cope with weak demand.

The unit price of clothing imported from China in the United States dropped from US $2.25 per square meter last year to about US $1.88 in the first half of 2020, a decrease of 16%, far higher than the average decrease of 3% of all clothing import prices. So far this year, Chinese suppliers have offered about 30% less than other Asian countries.

As of July this year, the United States has imported about 30 billion US dollars of textiles, clothing and home textiles from China, accounting for 90% of the total imports. Due to the trade war, the United States has imposed a 7.5% tariff on these products on the basis of the normal tariff.

"If trade tensions between the US and China continue to escalate, US fashion companies are likely to further significantly cut back on their purchases in China, even though it is not an economic priority," said Lu Sheng, an associate professor of fashion and apparel research at the University of Delaware

The deterioration of U.S. - China relations has also accelerated efforts by Chinese manufacturers and exporters to shift some of their production from China to neighboring countries to take advantage of lower labor costs and avoid US import tariffs. However, this shift has slowed down this year due to travel restrictions caused by the pandemic.

"Foreign investment has indeed played a crucial role in helping Vietnam develop and expand its garment production capacity," added dill of the University of Delaware.

According to Vietnam's plan and investment department, foreign direct investment into Vietnam's textile and garment industry has totaled $19 billion 500 million over the past thirty years, of which South Korea is the largest source, followed by Taiwan, Hongkong and Mainland China.

In recent years, China's exports of finished garments and textile materials to other countries (countries that make garments) have decreased. In the first seven months of this year, China's textile exports increased by 31%, while exports of clothing and accessories fell by 16%, according to the General Administration of customs.

In value terms, more than half of the rest of Asia's textile imports came from China last year, up from 37.2% a decade ago.

Although American fashion companies have been reducing their dependence on Chinese products for many years, China will remain a key base for us procurement in the near future, especially after the coronavirus epidemic has prompted many companies to cut costs substantially.

In the Fashion Industry Association survey, about 70% of respondents expect to reduce their purchases from China by 2022, down from 83% last year.

"It's hard for our company to find sources outside China, plus the [product] price points it serves," said one executive "Even with the tax, we can't get the right fabric, price and production elsewhere. Other areas must develop our ability to evacuate. As a result, we are considering all cost cutting measures. "

Our polyester yarn has a great influence on the current situation.