From Washington

As shipping delays continue to grow, from Asia, to the U.S. West Coast, and beyond (see Marketplace, NYT, Footwear News, Supply Chain Dive, Sourcing Journal, Loadstar, American Shipper, LA Times), TGA urges members to contact their members of Congress to urge them to address the crisis. The easy-to-use system allows you and your colleagues to send multiple letters to your members of Congress in just a couple of minutes. Please send letters, and encourage your colleagues to do so, too.

On March 5, the U.S. government published January 2021 import data. U.S. travel goods imports (as described under HTS Heading 4202 – click links to get specific import data on luggage, backpacks, flatgoods, handbags, business cases/laptop bags, and travel bags) slid 31.3% (by volume) in Jan. 2021 (versus Jan. 2020). In addition to the obvious impact of COVID-19 on sales and on travel, the latest import numbers show the accelerating trend away from China. In Jan. 2021, U.S. travel goods imports from China fell 41.1%, with China accounting for only 54.2% of total U.S. travel goods imports. For comparison, in 2016, China accounted for 84.7% of all U.S. travel goods imports. U.S. travel goods imports from most major suppliers also fell in Jan. 2021 – #2 Vietnam (-2.9%), #3 Cambodia (-23.5%), #4 Burma (Myanmar) (-12.0%), and #5 India (-29.3%). Despite the declines, most top suppliers gained import share from China, with U.S. travel goods imports from Vietnam now accounting for 21.8% of all U.S. travel goods imports, followed by #3 Cambodia (7.6%), #4 Burma (Myanmar) (4.8%), and #5 India (3.4%). U.S. imports of travel goods account for approximately 99% of the U.S. travel goods market.

TGA’s sister organization, the American Apparel & Footwear Association, has published detailed guidance for members sourcing from Myanmar (Burma) in light of the recent military coup (see related article below). TGA recommends that any member sourcing from Myanmar review the guidance.

On Jan. 31, the military in Myanmar launched a coup, overthrowing the democratically elected government in the country, and detaining its leaders, including State Counsellor Aung San Suu Kyi. The coup has led to massive protests. Feb. 1 statements from President Biden and Senate Minority Leader Mitch McConnell implied strong bi-partisan support for U.S. sanctions if the military does not reverse course quickly. TGA will keep members apprised of the impact of any potential sanctions on the industry and whether the situation on the ground in Myanmar is impacting production. Myanmar is the 4th largest and fastest growing supplier of travel goods to the U.S., growing 66.5% in 2020. Even so, U.S. travel goods imports from Myanmar still account for only 3.8% of total U.S. travel goods imports. Please let us know if your production has been impacted in the country.

On Feb. 1, TGA joined the Accessories Council, the Council of Fashion Designers of America, and the American Apparel & Footwear Association (AAFA) to urge Congress to include industry priorities in the next stimulus package. Recommendations include a short-term federal backstop to support trade credit insurance; limited legal liability protection to safeguard businesses from unfair lawsuits; return to work incentives; Healthy Workplaces Tax Credit to support those businesses that have retrofitted facilities and purchased personal protective equipment to protect employees and customers; and duty drawback for charitable donations. READ MORE

On January 25, TGA joined 71 associations in urging the European Union (EU) and the U.S. to remove all current and suspend all future retaliatory tariffs affecting or threatening Trans-Atlantic trade.

On January 15, the office of the U.S. Trade Representative (USTR) announced that it is “not taking any specific actions in connection with the findings at this time” with respect to its Section 301 Tariff Investigation against Vietnam on currency, even though USTR found that Vietnam is manipulating its currency. TGA strongly opposed the imposition of tariffs in the USTR timber and currency investigations, testifying at USTR public hearings held on December 28 and December 29. There were concerns that outgoing President Trump would impose punitive tariffs on U.S. imports from Vietnam (as high as 25%) before he left office on Jan. 20, 2021. Note that USTR has not announced any decision in the Section 301 timber investigation. Vietnam is the #2 supplier of travel goods to the U.S. market. In the first eleven months of 2020, U.S. travel goods imports from Vietnam increased 12.3%, with Vietnam supplying 19.3% of all U.S. travel goods imports during that period.

On Dec. 21, Congress adjourned for the year without extending the Generalized System of Preferences (GSP) trade preference program. As a result, GSP expired on Dec. 31, 2020, meaning that U.S. travel goods imports from a wide range of developing countries, including Thailand, Cambodia, Burma (Myanmar), Indonesia, Sri Lanka, the Philippines, and Pakistan no longer enter the U.S. duty-free starting Jan. 1, 2021. In response, U.S. Customs and Border Protection (CBP) issued the following instructions, which enables importers to retain the right to collect refunds of duties paid if GSP is retroactively renewed. In the first eleven months of 2020, U.S. travel goods imports from GSP countries increased 10.7%, supplying 15.0% of all U.S. travel goods imports during that period. TGA urges you to write your members of Congress to urge them to retroactively renew GSP as soon as possible. It only takes a couple of minutes.

On January 7, TGA and TGA members joined over 200 organizations in opposing proposed punitive tariffs against U.S. travel goods imports from Vietnam under the Office of U.S. Trade Representative’s (USTR) Section 301 Tariff Investigations against Vietnam. TGA also filed separate comments opposing the tariffs in the USTR timber and currency investigations. There is growing concern that President Trump could impose punitive tariffs on U.S. imports from Vietnam (as high as 25%) before he leaves office on Jan. 20, 2021. Vietnam is the #2 supplier of travel goods to the U.S. market. In the first eleven months of 2020, U.S. travel goods imports from Vietnam increased 12.3%, with Vietnam supplying 19.3% of all U.S. travel goods imports during that period.

On January 7, the U.S. government published import data for November 2020. U.S. travel goods imports (as described under HTS Heading 4202 – click links to get specific import data on luggage, backpacks, flatgoods, handbags, business cases/laptop bags, and travel bags) slid 22.8% (by volume) in the first eleven months of 2020. In addition to the obvious impact of COVID-19 on the industry, the latest import numbers show the accelerating trend away from China. In the first eleven months of 2020, U.S. travel goods imports from China fell 35.4%, with China accounting for only 57.6% of total U.S. travel goods imports. For comparison, in 2016, China accounted for 84.7% of all U.S. travel goods imports. Meanwhile, despite the pandemic, U.S. travel goods imports from #2 supplier Vietnam (12.3%), #3 Cambodia (9.3%), and #4 Burma (Myanmar) surged in the first eleven months of 2020. In fact, U.S. travel goods imports from Vietnam now account for 19.3% of all U.S. travel goods imports, followed by #3 Cambodia (7.2%), #4 Burma (Myanmar) (3.9%), #5 India (3.4%), and #6 Indonesia (1.4%). U.S. imports of travel goods account for approximately 99% of the U.S. travel goods market.