Much of the recent talk about the uncertain future of trade policy under the next administration has failed to mention the already-soft state of U.S. trade in soft goods.
According to the U.S. Census Bureau, total U.S. goods and services imports fell by 5 percent to $187.6 billion in September compared to the same month in 2015, while exports were virtually flat at $125.2 billion.
Apparel imports dropped by almost 11 percent, however, more than double the drop of overall imports, to $8.3 billion on a CIF basis, capping seven straight months of year-over-year declines.
After finishing 2015 with disappointing sales and bloated inventories, many U.S. brands and retailers approached 2016 with extreme caution, even canceling orders in some cases to bring inventory in line with reduced sales projections.
The average cost per square meter of apparel imports has fallen by almost 4 percent so far this year compared to the same period in 2015, a result of the continuing quest to reduce cost of goods sold as a way to enhance profitability in a low-growth business.
China, Vietnam and Bangladesh are the top three sources of imported U.S. apparel, collectively representing more than half of year-to-date apparel imports. China has seen its share of the U.S. market slip in recent years as countries with lower labor costs like Vietnam and those in closer proximity like El Salvador have gained share.
Apparel exports fell by 5 percent in the month, to $489 million. Total dollar apparel exports on an FAS basis have fallen every month so far this year compared to the same period in 2015.
Canada, Mexico and the United Kingdom remain the top trading partners, together representing more than half of all U.S. apparel exports.
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