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U.S. fashion industry concerned about trade wars hindering supply

Angela Gonzalez-Rodriguez | Wednesday, July 24 2019

New York – The fashion industry in the U.S. have shared they're concerned about the trade wars with China might hinder their business and supply over the next couple of years.

The United States Fashion Industry Association (USFIA) released Tuesday its sixth annual Fashion Industry Benchmarking Study, a survey of executives from leading fashion brands, retailers, importers and wholesalers, including some of the largest brands and retailers in the country.

The survey asked respondents about their business outlook, sourcing practices, utilization of Free Trade Agreements and preference programs and views on trade policy.

However, the impact of trade wars and uncertainty about trade policies is weighing heavily on respondents as they reported being more cautious and less optimistic about the five-year outlook for the U.S. fashion industry.

According to the report, one year ago 84 percent of respondents were optimistic or somewhat optimistic about the five-year outlook. Now, the number has dropped to 64 percent, with one-quarter of surveyers saying that they are neutral on the matter.

Fashion industry’s main concern is increasing production and sourcing costs beyond China

“But as we look at the data, we see some other insights that are very troubling. Not just costs in China are increasing, but the costs to source in the main alternatives to China – especially Vietnam, Bangladesh and India -- also are soaring. And the uncertainty seems to also affect logistics and transportation costs,” USFIA President Julia K. Hughes said in a statement.

In fact, the survey found that the biggest challenge for the fashion industry is the impact of increasing production and sourcing costs, with 84 percent of respondents reporting the challenge. Some of these cost increases are linked to the 301 action against China for the majority of the respondents to the survey.

All the survey’s respondents represent companies with headquarters or major management offices in the United States and they sell products in the United States, with over half of them also selling products in Canada, Western Europe, Mexico, and Asia.

Chart: Fashion companies' sourcing portfolio, 2019. 2019 Fashion Industry Benchmarking Study, USFIA

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