With tariffs hitting China, \'Made in Cambodia\' may become new fashion label
The next designer handbag you buy is unlikely to be labeled \"Made in China. Fashion companies eager to diversify their supply chains have expanded their manufacturing base in Southeast Asia to replace China. Then there was a trade war. Now, with tariffs on products such as Chinese handbags rising, countries such as Cambodia and Vietnam are more attractive to consumers than ever before -- Commodity manufacturers like Steven Madden and Tapestry coaches. While the Trump administration imposed tariffs on goods from many of its largest trading partners this year, it allowed some Cambodian products to continue tariffs -- Free access to the US market. S. market. \"This transformation has begun,\" said Steve LaMar, executive vice president of the American Apparel and Footwear Association . \". He said the talk of tariffs has caused \"a lot of anxiety\" and companies are measuring how quickly they can make more changes to their purchases. A study released in July by the United StatesS. According to the fashion industry association, while all companies involved in the survey purchase goods from China, 67% of companies are expected to reduce output or output in the country in the next two years. U. S. Trade protectionism is listed as the number one challenge in the industry. Steven Madden\'s chief executive, Edward Rosenfeld, told the company\'s recent earnings call that the company has been moving handbag production from China to Cambodia. Footwear and accessories manufacturers expect 15% of handbags to come from Cambodia this year, doubling in 2019. \"Frankly, it gave us three. \"Most of our peers are the first time this year because a lot of people are now trying to take this action,\" Rosenfeld said in a conference call on July 31 . \". \"Our head of handbag purchasing is actually there right now and a plan is being developed to improve this level. \"Coach, a luxury company that produces Coach and Kate Spade handbags, has adopted a similar strategy to increase production in Vietnam, leaving less than 5% of its purchases from China. Meanwhile, Vera Bradley mentioned in last December that it is considering sending manufacturing operations from China to Cambodia and Vietnam. \"Cambodia does offer good investment incentives, such as tax holidays,\" said Matt Van rushimaren, national manager of Cambodia, an emerging markets consultancy. \"As long as the tariff exemption persists, companies will be more motivated to invest in production capacity in Cambodia. \"The move to shift production has affected China: Hong Kong -- Headquartered in Stella International Holdings, which develops and manufactures footwear for brands such as Prada and Guess, as China and the United States develop, its inventory drops to its lowest level since 2009S. Strengthen trade rhetoric. According to an annual report by the National Bank of Cambodia, Cambodia\'s footwear exports increased by 25% in 2017 and garment exports increased by 8% in the same period, partly due to the increase in US demand. S. At the same time, Vietnam has also won the favor of foreign investors. Leading economic prosperity over the years, attracting billions Dollar investments in companies such as Samsung Electronicsand Intel Corp. It is shifting from a major exporter of agricultural products such as rice and coffee to a manufacturing hub in Southeast Asia. \"China\'s inflation rate is relatively low, its currency is stable and its politics is stable. All of this helps attract foreign investment, \"said Adam sitekov, executive director of the American Chamber of Commerce in Hanoi. Opportunity is obvious. Vietnam is a country of 95 million people, from bicycles to motorcycles to BMW, traveling fast on this road. Even before China and the United StatesS. The escalation of trade tensions in Cambodia, Free privileges for products such as handbags, suitcases and wallets are part of the United StatesS. Plan to help promote low Income country. The Trump administration has maintained that name so far. In addition to the threat of tariffs, wages in China are also rising steadily, while Cambodia is still one of the lowest. Labor cost countries. According to estimates from Oxford Economics, labor costs in Cambodia are a quarter in China. However, Lamar of the American Apparel and Footwear Association does recommend caution. \"Unfortunately, it is not easy to transfer from China,\" he said . \". One reason is that cheap labor is not necessarily equal to effective production. Cambodia has lower productivity compared to China, so it is a challenge to make more sophisticated products. In a survey by the Hong Kong Development Commission, the factory manager said the average labor productivity of Cambodian workers was about 50 to 60% of Chinese workers. Another reason is that Cambodia\'s infrastructure lags far behind China. In the global competitive power report of the World Economic Forum, the country\'s infrastructure ranks 106 out of 137 countries, behind neighboring Vietnam and Laos. Lamar said that this may bring difficulties to the exit of goods. Then politics. The U. S. The government recently said the Cambodian elections in July were \"flawed \". In the election, the ruling party won 125 seats in the National Assembly. \"So the US governmentS. Tommy Wu, senior economist at Oxford Economics, said Europe may review their trade policies and \"have the potential to stop giving tariff concessions to Cambodia\'s garment industry \". The move will be a blow to countries where clothing accounts for 64% of total exports. \"Setting more output in Cambodia should be careful until the political dust settles,\" said Sophie ear, associate professor of foreign affairs and world affairs at the West College in Los Angeles. -- With the help of Bloomberg\'s Spring and Golden Mountain red.