Apparel Online Bangladesh Magazine December Issue 2018 | Page 37

BANGLADESH INSIGHT
Would Bangladesh become a beneficiary of the China-US trade hostilities?
T
he ongoing trade tussle
between the world’s two largest
economies – USA and China – is
getting murkier with each passing
day! If China has accused the US of
launching the ‘largest trade war in
economic history’, the US President
is in no mood to back down either,
keeping true to his presidential
campaign promise of making trade
fairer for the US.
The US administration has
reportedly so far imposed three
rounds of tariffs on Chinese
products this year, totalling US $ 250
billion worth of goods, with Donald
Trump warning sterner action if
China retaliates. If Trump goes
ahead with his warning, it would
virtually mean that all of China’s
exports to the US would be subjected
to duties, apparels included. In
terms of figures, even though China
improved on its US exports in
August (contributed 31.68 per cent
of US’ total imports as compared
to 30.74 per cent in Jan-Jul period),
the overall repercussions this year
are pretty evident with China’s
export share to USA dropping by
1.04 per cent in the January to
August period of 2018. Many in
the industry are terming this as a
one-time development in view of
buyers’ so-called cautious sourcing
approach ahead of the festive season
in USA. China contributed 32.83
per cent in overall apparel import
value by USA in the same period last
year, which subsequently reduced to
31.68 per cent.
The world’s second-largest apparel
exporter globally after China, the
tit-for-tat trade battle between
the two economic superpowers
seems to be opening a new door
of opportunity for Bangladesh.
As per media reports, the results
are already here for everyone to
see with US buyers reportedly
increasing their order volumes in
the country. If experts are to be
believed, the increased intensity
of the trade war would mean more
US orders making their way to
Bangladesh from China.
Many garment makers in the
country have already started
witnessing US orders trickling in,
which were once placed in China
and cases in point are some of the
renowned names in the Bangladesh
RMG sector like Viyellatex Group
and Ha-Meem Group, etc.
As per reports, at least three
American buyers, who had folded
their business in Bangladesh
earlier, are now all set to place
bulk orders with Viyellatex, and a
confirmation on the same has been
received from the Group’s Chairman
and Managing Director David
Hasanat. Adding to the trade war
are the increasing wages in China
that have rendered it less feasible
for the American buyers, thereby
forcing them to head for Bangladesh,
experts observed.
Similarly, Ha-Meem Group, which
exports 90 per cent of its production
to the US, is reportedly expecting
higher work orders from the
American retailers and buyers.
Another prominent name in
Bangladesh apparel sector,
Standard Group too is expecting
increased orders from the US
buyers as a part of business shift
from China. “We have already got
feelers from our buyers. However,
with minimum wage yet to be
implemented in our country, orders
have not been placed as we (buyers
and manufacturers) are waiting
Many garment
makers in the
country have
already started
witnessing US
orders trickling
in, which were
once placed
in China and
cases in point
are some of the
renowned names
in the Bangladesh
RMG sector like
Viyellatex Group
and Ha-Meem
Group, etc.
for things to settle down first,”
observed Hasnat Mosharraf,
Director of Standard Group while
speaking to Apparel Online.
Standard Group is one of the
renowned names in both knitted
and woven apparels in Bangladesh
with a customer base ranging from
small retailers to large hyper-marts
around the globe, especially in
North America. It has built a long-
lasting partnership with a majority
of its customers through impeccable
service and consistent quality
assurance that includes names like
Zara, Tommy Hilfiger, GAP and
Sears, etc.
Meanwhile, interacting with the
media to express his views on
the effects of the ongoing trade
war between USA and China, the
President of the apex traders’ body
BGMEA, reportedly observed that
it’s a bit too early to expect any
significant order shift.
Perhaps taking a cue from the
favourable wave flowing in
Bangladesh’s direction, the apparel
makers have reportedly put forth
a proposal to make garments
manufactured from US-grown
cotton, duty-free to the US market.
The proposal was placed by the
Bangladesh Garment Manufacturers
and Exporters Association
(BGMEA) during a farewell
programme to felicitate the outgoing
US Ambassador Marcia Bernicat.
“We use a lot of US cotton to make
garments and a significant part
of those are shipped back to the
US. If we get duty-free access for
garments made of US cotton, I think
this will be a win-win situation
for us, for the US cotton growers
and for the US consumers who will
get products at a cheaper price,”
reportedly maintained BGMEA
President Siddiqur Rahman,
adding, “So, I would request you to
kindly discuss this issue with your
Government for consideration, and
would appreciate a response and
your further guidance.”
If accepted, increased order shift
from China to Bangladesh is in the
offing for sure.
www.apparelresources.com | December 2018 | Apparel Online Bangladesh
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