Textiles and Apparel

U.S. total exports of textiles and apparel continued to increase by about the same amount in 2014 ($592 million) as in 2013 ($543 million) (table TX.1). Domestic exports paralleled this trend, increasing by about 2 percent in 2014, with two segments contributing the largest shares of the increase. U.S. domestic exports of fabrics continued to lead sector exports, rising by 3 percent to $6.6 billion (see table TX.2). U.S. domestic exports of fibers and yarns, excluding raw cotton and raw wool, remained the second-largest export group, increasing by 1 percent to $5.3 billion. The overall rise in exports of textiles and apparel largely reflected increased shipments to Mexico of broadwoven fabrics. Although smaller, the increase in U.S. exports of fibers and yarns of 9 percent ($133 million) to Honduras also contributed to the overall increase in sector exports. A large part of these exports were cotton yarn.

U.S. general imports, consisting largely of apparel (74 percent), rose by 3 percent in 2014 to $121.7 billion. This increase in imports reflects the continued strengthening of the U.S. economy and rising consumer confidence, as indicated by a 3 percent increase in personal spending on clothing in 2014.¹

U.S. Exports²

U.S. total exports of textiles and apparel increased by $592 million (3 percent) to $23.9 billion in 2014. Slightly over 81 percent of these total exports consisted of domestic exports, while the remainder were re-exports. Fabrics, fibers and yarns (except raw cotton and raw wool), and apparel together accounted for just over three-quarters of the value of U.S. domestic exports in 2014.³ Of these, fabrics represented the largest export product group, accounting for 33 percent of total domestic exports in the sector. Mexico was the largest market for fabrics. Fibers and yarns were the second-largest product group, accounting for 26 percent of total domestic exports. Honduras was the largest market for fibers and yarns, fueled by investments from U.S. yarn and knit apparel companies. Apparel was the third-largest export product group, accounting for approximately 20.5 percent of total domestic textile and apparel exports. Canada was the largest export market for apparel products.

Although re-exports in the textile and apparel sector accounted for just over 19 percent of total exports, the majority of the re-exports were concentrated within the apparel product grouping. As shown in the following tabulation (millions of dollars), re-exports accounted for 44 percent of U.S. total exports of apparel in 2014, up from 32 percent in 2010:⁴

Reportedly, apparel companies are increasingly importing apparel into distribution centers in U.S. foreign-trade zones (FTZs) for inventory control and distribution, then re-exporting the apparel to Canadian and Mexican markets, with plans to export to other Western Hemisphere markets in the future. Using FTZs allows these companies to cut costs in a number of ways, including importing products into the United States free of duty, avoiding the financial burden and paperwork associated with duty drawbacks,⁵ reducing merchandise fees charged by Customs, and generally streamlining administrative procedures with Customs. ⁶

U.S. Imports

U.S. imports rose by almost $3.7 billion (3 percent) in 2014. According to industry sources, the increase in imports reflects a continued strengthening of the U.S. economy⁷ and U.S. consumer confidence. The value of U.S. apparel retail sales grew by just over 2 percent in 2014,⁸ as spending on clothing for personal use grew by 3 percent. ⁹

U.S. imports of textiles and apparel are principally composed of apparel, which represented almost three-fourths of total U.S. sector imports by value in 2014. The increase in imports in the sector was largely driven by manmade-fiber apparel. This trend reflected strong demand for active/athletic wear¹⁰ as consumers stepped up their preferences for the functional and performance properties (i.e., moisture management, wearing comfort, elasticity, and recovery) that manmade fibers offer but natural fibers do not.¹¹

China was the largest U.S. supplier of textiles and apparel in 2014, rising by 2 percent in 2014 ($735 million). However, U.S. imports from Vietnam, the second-largest supplier of these products, grew by 14 percent ($1.2 billion) and were responsible for a large share of the overall growth in U.S. textile and apparel imports in 2014. Despite China’s continued dominance, the data and industry sources suggest that U.S. retailers and brands are continuing a long-term trend of diversifying their import sources to countries such as Vietnam and India¹² as China’s textile and apparel production costs have increased.¹³ Even though manufacturers in China increased productivity to help offset rising production costs, China’s share of total textile and apparel imports remained at about 39 percent in 2014, virtually the same share as in 2013.

Vietnam’s growth as an important supplier in recent years reflects the country’s low labor costs and its industry’s focus on specialization, modernization, and increasing value added.¹⁴ In 2013, many new textile and apparel plants began production in Vietnam, fueled largely by foreign investment stimulated by the negotiation of the Trans-Pacific Partnership agreement. In 2014, about 20 international firms reportedly invested in Vietnam’s apparel industry. In November 2014, the Vietnam Textile and Apparel Association reported that foreign companies earn $12 billion of Vietnam’s $20 billion in annual textile and apparel export revenue. However, as a reaction to the increasing size of foreign investment, authorities in Vietnam put a hold on foreign investment in manufacturing in the sector.¹⁵

India, the third-largest supplier of U.S. imports of textiles and apparel, accounted for 6 percent of sector imports. Imports from India grew by $480 million (7 percent) in 2014. This growth likely reflects a continuation of certain trends in India’s textile and apparel industry—technology upgrades and a focus on innovation in product and design¹⁶ —as well as the appeal to certain U.S. consumers of cotton and rayon clothing, an Indian specialty. India was the fourth-largest supplier of cotton apparel to the U.S. market in 2014.¹⁷

U.S. imports of textiles and apparel from Mexico, the United States’ fourth-largest supplier, grew by $146 million or 3 percent. This trend likely reflects products made from U.S. broadwoven fabrics shipped to Mexico for apparel production. Two-thirds of the value of imports from Mexico consisted of apparel. In Central America, the most important source of U.S. imports was Honduras. Imports from Honduras also increased in 2014 by $100 million or 4 percent. A large part of this increase was in imports of nonwoven apparel and women’s and girls’ apparel.