Trade war to hit high-end US fashion brands dependent on specialised Chinese manufacturing
- New US study shows low-end clothing production moving rapidly to Vietnam, Cambodia and Bangladesh, but high-end goods still made in China
- The average retail price of clothing manufactured in China has more than doubled since the start of the trade war
High-end US fashion brands have become more reliant on China for manufacturing, making them more vulnerable to an increase in trade war tariffs, a new study shows.
Research from a professor at an American university shows that other countries, further down the value chain than China, cannot compete on quality on such high-end items, despite the fact many areas of the textiles industry are engaged in a race to the bottom, in terms of costs.
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, despite its price advantage being eroded rapidly, due in part to increasing labour costs and the early rounds of US tariffs. 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.
