Tighter US rules to ban imports from China's Xinjiang are compounding pressure on Vietnam's apparel and footwear makers, hitting a sector that has already shed nearly 90,000 jobs since October in the global manufacturing hub as demand slowed
Of the $15 million worth of apparel and footwear shipments held up for UFLPA checks more than 80% were from Vietnam, and only 13% of its cargoes were cleared for entry, U.S. customs data up to April 3 showed.Many U.S. importers are still sanguine, but their supply chains could still be disrupted as Vietnam's apparel makers depend on China for about half of their input materials, according to the country's industry association.
While U.S. controls have been far more frequent for the electronics industry, especially for solar panels which could be made with polysilicon from Xinjiang, only 1% of electronics cargoes checked were denied entry, as opposed to 43% of apparel and footwear shipments. "Vietnam's heavy reliance on cotton textile materials from China poses a significant risk of containing Xinjiang cotton, as the province produces over 90% of China's cotton," Sheng Lu, Director at the Department of Fashion and Apparel Studies at the University of Delaware, told Reuters.
The Federal Maritime Commission, the U.S. agency responsible for international ocean transportation, warned earlier this month of potential supply chain disruptions caused by UFLPA checks. Western companies should "make more significant efforts to map their supply chain, figure out where production at each stage happens and demonstrate adequate due diligence", he said.Weaker demand has forced the industry, Vietnam's biggest employer after agriculture, to shed nearly 3% of its 3.4 million workers since October, and contributed to an 11.9% drop in the country's exports and a 2.
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Analysis: World's apparel, sneakers hub Vietnam struggles as US ban on Xinjiang cotton bitesTighter U.S. rules to ban imports from China's Xinjiang are compounding pressure on Vietnam's apparel and footwear makers, hitting a sector that has already shed nearly 90,000 jobs since October.
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