WASHINGTON — Cambodia led apparel import declines to the U.S. in December, as eight of the top 10 apparel suppliers posted decreases, the Commerce Department’s monthly trade report showed Tuesday.
The seventh-largest supplier to the U.S., Cambodia registered a 27.3 percent decline in apparel imports to 57 million square meter equivalents in December compared with December 2015. For the entire year of 2016, Cambodia also led the top 10 apparel suppliers in declines, posting a 14.1 percent decrease compared with 2015.
Cambodia has been plagued by a range of issues in the past year, from tensions over raising the minimum wage, to growing traffic fatalities to worker and union activist strikes that have created uncertainty for brands and retailers in the Southeast Asian nation.
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“Whether it’s strikes, internal tension between workers and employers, and pressure on the industry, there is no question that is all weighing heavily on sourcing in Cambodia and we see that in the numbers,” said Julia Hughes, president at the U.S. Fashion Industry Association. “American and European brands and retailers have worked very hard to try to be a bridge between the Cambodian government and the workers and the manufacturers, and to some extent that has been successful, but I think clearly there’s been substantial impact on orders placed in Cambodia.”
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Nate Herman, senior vice president of supply chain at the American Apparel & Footwear Association, said there appears to be a “general concern” about stability in Cambodia that is borne out by the import declines.
Herman and Hughes said Vietnam, the second-largest apparel supplier to the U.S., appears to be one of the biggest recipients in the shift of some business out of Cambodia. Vietnam was only one of two countries that posted apparel import increases in December, with its apparel imports to the U.S. rising 10 percent to 261 million SME in the month compared to a year earlier.
China, the top supplier to the U.S., saw its apparel imports remain flat from a year earlier to 808 million SME.
“I think a lot of it [from Cambodia] is going to Vietnam,” Herman said. “Then it appears some is going to India and some is going to Africa.”
India, the sixth-largest apparel supplier to the U.S., posted the only other import increase among the top 10 suppliers, with a 2.8 percent increase to 73 million SME in December.
Herman said India is a “well-established” supplier to the European market, as well as a key supplier to its own “fast growing” market.
“People are realizing they can do business there,” Herman said. “India is set up for smaller runs and more customized runs, which is exactly the trend in the U.S. market in terms of fast fashion and India is set up well for that.”
Overall textile and apparel imports to the U.S. from the world rose 2.5 percent to 4.8 billion SME in December compared with a year earlier. Apparel imports fell 1.46 percent to 1.98 billion SME, while textile imports rose 5.6 percent to 2.8 billion SME.
In the Western Hemisphere, some countries registered import growth while others saw declines.
For the month, apparel imports from Guatemala were up 11 percent, while apparel imports from Nicaragua were rose 21.2 percent in December. However, apparel imports from El Salvador were down 3.1 percent and imports from Honduras fell 0.77 percent.
Mexico, the eighth-largest apparel supplier to the U.S., posted a 0.72 percent decline in apparel imports, but the North American country posted a 6.7 percent increase in combined apparel and textile imports in December compared with a year earlier.
President Trump has said he plans to renegotiate the North American Free Trade Agreement with Mexico and Canada. Trump also stirred up controversy last week when his aides said he was considering imposing a 20 percent tariff on Mexican imports as a way to pay for a massive wall along the U.S.-Mexico border.
“While the apparel numbers for Mexico are down slightly [in December] and everyone is obviously concerned about what might happen with NAFTA, the fact is there is a strong trading relationship with Mexico,” Hughes said. “We have many member companies that rely on Mexico and CAFTA (the Central American Free Trade Agreement) suppliers and will continue to speak out in support of the Western Hemisphere supply chain.”
The U.S. trade deficit narrowed to $44.3 billion in December from $45.7 billion in November.