Kazi Zahidul Hasan :
US apparel import from suppliers other than China will increase as much as US$10,400 million due to tariff war between the world’s two largest economies, according to a study.
It says that trade diversion effect of the tariff war will bring more apparel imports into the US market from Asian suppliers other than China.
“A supply chain shift as a result of the intensified tariff war has created an opportunity for Asian suppliers to grab even a larger share in the US apparel market,” says the study which carried out recently by the Department of Fashion Studies and Apparel of University of Delaware.
The study cites that when the punitive tariff is imposed on textile and apparel products, the value of US apparel import from China will decline ranging from US$4673 million to US$8858 million annually compared to base year level in 2017.
Analysts said, the supply chain shift creates big opportunity for Bangladesh to grab an even bigger share in the US apparel market. “Garment exports from Bangladesh to the US has been growing over the last few months because of shifting orders from China to Bangladesh as a result of intensified Sino-American trade war,” Dr Ahsan H Mansur, Executive Director of the Policy Research Institute (PRI), told The New Nation.
Bangladesh’s apparel exports to the US saw a 15.57 per cent growth in the US market during January-March of the current calendar year.
The country’s apparel export to the US stood at US$5.40 billion in 2018, showing a 6.65 per cent year-on-year growth, according to Office of Textiles and Apparel (Otexa) data released on March 6.
Dr Ahsan Mansur cited that Bangladeshi manufacturers would have to concentrate more on improving capacity and product diversification to grab the opportunity, created from US-China trade war.
“Not only Bangladesh, other Asian manufacturers like Vietnam, Indonesia and Cambodia might gain from the trade war,” he noted.
Triggered by the US concern over China’s unfair trade practices, a large-scale tariff war was broken out between the United States and China in mid-2018.
As of May 2009, as much as US$ 260 billion of worth China’s exports to the US and US$110 billion in US export to China, including some textile products, were subjected to punitive tariff ranging from 10 per cent to 25 per cent on top of the regular tariff rate.
“The shift in supply chain dynamics from the trade conflict between the world’s two biggest economies could help Bangladesh emerge as a potential winner,” Dr Khondaker Golam Moazzem, an Industrial Economist and Research Director at the Center for Policy Dialogue (CPD), told The New Nation.
He said, Bangladesh could benefit from increasing import by the US, especially, ready-made garments (RMG), which accounts for 80 per cent of Bangladesh’s total exports.
“As the trade war escalated, the country’s garment shipments saw a significant growth as American buyers are placing more work orders with local factories in order to sustain their businesses from increasing tariffs,” he said.
Dr Khondaker Golam Moazzem, however, expressed skeptical view over grabbing full opportunity by local exporters when they are constraining with value addition product diversification.
“Bangladeshi apparel manufacturers need to make value-added products and improve negotiation skills to reap full benefit from US-China trade war,” he added.
