Vietnam’s apparel sector is in for some trouble!
The Trump administration has ordered probe into Vietnam’s currency practices, which many fear could just be the beginning of another trade war – this time with Vietnam.
If there is no successful resolution on the aforementioned issue, it could results in tariffs, quotas and other restrictions on imports from Vietnam. And that’s not good for Vietnam – especially for its rich apparel industry.
The American Apparel & Footwear Industry or AAFA has, meanwhile, expressed its strong displeasure over the US Government’s investigation orders as it could pave way to impose new punitive duties on any US imports from Vietnam.
AAFA has urged the Trump administration to refrain from causing any further disruption to the supply chain that is already battling the pandemic crisis.
The National Council of Textile Organisations (NCTO), which represents US textiles from fibres to finished sewn products, has, however, welcomed the US Government’s decision to order probe into the currency matter.
Further on the same, Kim Glas, President and CEO, NCTO, said “The US-Vietnam trading relationship suffers from several of the same problems that we have experienced with China. There are strong indications of a purposefully undervalued currency that warrants a full investigation.”
Kim further added that the industries in two countries are very closely linked as Vietnam sources most of its textile inputs from China.
Notably, Vietnam has exhibited huge growth in the US textile and apparel market and held a 15.8 per cent import market share for January-July 2020 period.
Here it is important to note last month US Government had announced to ban the import of cotton and cotton garments from Xinjiang and Anhui in China. Xinjiang accounts for 85 per cent of cotton produced in China.
Meanwhile, India would be watching the developments closely as this offers another opportunity to India to increase its exports to the US.
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