High-end US fashion brands have become more reliant on China for manufacturing, making them more vulnerable to an increase in trade war tariffs.
According to the new US study, low-end clothing production can easily be shifted to Vietnam, Cambodia and Bangladesh, but high-end goods are still made in China. However, the average retail price of clothing manufactured in China has more than doubled since the start of the trade war and the US brands may be forced to stomach the tariff hike.
Other countries cannot yet produce in the same quantity or with the same quality as China due to technological constraints. The report shows that China’s stranglehold on the garment supply chain continues. The average retail price of clothing manufactured in China was US$25.7 per unit back in the second quarter of 2018, only slightly higher than clothing from Vietnam. A year later, China’s cost more than doubled to US$69.5 per unit.
By the end of the first quarter of 2019, the number of apparel items made in China that were held in US clothing retailers’ inventories were down more than two thirds to 8,352 stock-keeping-units (SKUs). China still dominated the US retail market as the largest supplier of new clothing items (193,774 SKUs) from the beginning of 2016 to late-April 2019.
