Trepidation of Apparel and Textile-Producing Regions by U.S. Elections
2016 has been an eventful year characterized by unexpected developments, including Brexit and its wide-ranging ramifications and a few months later, the election of Donald Trump as the next president of the United states. Both have left textile and apparel industry pundits wondering what the year 2017 will hold for them.Following is a brief review of the general outlook from some of the world's leading textile/apparel supplying nations:
The Bangladesh apparel industry — generally, optimistic despite the new administration's pledge to bring manufacturing jobs back to the United States.
However, some Bangladeshi experts privately say that the United States would not be able to sustain labor-intensive textile/garment manufacturing because skilled workers are not abundantly available and even if they were, their wages would be extremely high, making it unprofitable for U.S. manufacturers to produce textile and clothing in the country.
Trump's election campaign rhetoric on terminating U.S. trade agreements to protect American trade interests is seen by a section of Pakistan's textile and the garment industry as a move toward protectionism.
According to Pakistan's Statistics Bureau, Pakistan's textile and garment exports, after reaching a high of $13.46 billion in past years, have been steadily declining, falling to $12.47 billion in fiscal year 2016.
In addition to threatening to rip up U.S. trade agreements, Trump said he would impose punitive tariffs on goods from various countries in order to create more jobs in the United States, but some Pakistani textile and apparel suppliers have been saying that by entering into long-term supply arrangements they had "nothing to fear for the time being."
China, the world's largest textile and apparel supplier, is also evaluating the effects of the U.S. election result on its textile and apparel exports. China has, in any case, been shifting its production to other low-cost countries such as Vietnam, Laos, Bangladesh and even Africa, including Ethiopia and Kenya.
The Chinese textile and apparel industry had been growing at double-digit rates. "Now we have a 6.5 percent growth in our exports. The biggest challenge facing us is the weak demand in Europe and flat demand in the USA. The market is like a cake … only, it is not getting bigger, as we face competition from Bangladesh, Vietnam and others."
African textile and apparel suppliers, including foreign suppliers such as those from India, China and Turkey that produce in African countries such as Ethiopia and Kenya enjoy the privileges of duty-free exports to the United States under the latter's African Growth and Opportunity Act (AGOA), which has allowed countries such as Kenya and others to increase textile production and generate jobs. AGOA covers 38 sub-Saharan countries.Trump's campaign rhetoric against imports has raised concerns among Africans that AGOA could be reviewed and made more stringent.