REPORT: Vietnam & Bangladesh Apparel Industry Bolstered by Trade War

HANOI, Vietnam-The ongoing trade war between the U.S. and China could have positive implications for Bangladesh and Vietnam, two major apparel-manufacturing hubs. A recent report by Nikkei Asian Review says tariffs may influence more companies to shift production to these regions.

Currently, China is the largest global exporter of apparel, but the numbers have dropped in recent years as companies continue to search for cheaper labor elsewhere. Nikkei notes that Bangladesh holds the title as second-largest apparel exporter, primarily due to its more competitive labor costs.

While apparel is not currently in the crosshairs of any specific tariff directed by the Trump Administration, the report notes that increasing sanctions on Chinese technologies could have a ripple effect on manufacturing and production. Recent incidents like the arrest of Meng Wanzhou, chief financial officer at Huawei Technologies by Canadian authorities for violating U.S. sanctions against Iran signal some escalation. Huawei doesn’t produce machinery for apparel decoration, but Nikkei presents an example of how restrictions on Chinese machinery and technology could impact the industry.

“A garment factory that uses equipment from these companies will not be allowed to supply uniforms or any other products to U.S. government agencies,” the report explains. “And if a company is found to have made false statements about what equipment it uses, the U.S. could move to block its ability to carry out international transactions in dollars.”

Though many of the tariff proposals are still in flux, multiple countries, including the U.S. say they will begin implementing duties in early 2019.