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US prefers sourcing from China

Most US fashion manufacturers and retailers prefer to source from China.

Some 91 per cent of them source from China.

Vietnam is the second go-to sourcing spot.

Bangladesh has been a popular sourcing destination because of its low-cost labor, but there are compliance issues with that country’s factories. So only 32 per cent of US fashion industry executives expect to increase their sourcing there.

While duty-free imports are critical for keeping costs down, most of the 19 free-trade agreements the United States has with other countries are underutilized. Only the North American Free Trade Agreement is used by a significant proportion of US manufacturers.

What is worrying US business is the tariff their country is threatening to impose on imports from major US trading partners. American manufacturers are opposed to the US border adjustment tax that would tax imports and subsidize exports.

Second on their list of concerns is competition from e-commerce sites that are cutting into bricks-and-mortar store sales. Some 57 per cent of them are worried about the growth of companies such as Amazon and new entrants to online sales. They feel bricks-and-mortar stores are still an important source for shoppers.

Only 71 per cent of US fashion industry executives feel optimistic about the future, down from 92.3 per cent surveyed last year.

 
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