Why Central America Has Managed to Dodge Trump’s Trade Ire

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I had not seen the article, which mentions several AAPN members, as well as myself and AAPN president Tony Anzovino, when it was published. This one is really good. Sourcing Journal’s publisher Eddie Hertzman was in the audience for this amazing regional conference. I recommend using this article to support your own marketing.

Why Central America Has Managed to Dodge Trump’s Trade Ire
JUNE 19, 2018, Arthur Friedman, onlinesourcingjornal.com

Amid all the drama surrounding President Trump‘s imposition of tariff on China, Mexico, Canada and the European Union, Central American countries have been able to stay above the fray.

That’s a good thing for many companies that consider the region vital to their supply chain, according to executives at the 2018 pro:Americas NYC Regional Summit hosted by the Americas Apparel Producers’ Network (AAPN).

Responding to a question on why Trump hasn’t gone after the Central American Free Trade Agreement like he has the North American Free Trade Agreement (CAFTA), AAPN managing director Mike Todaro, said, “The U.S. has a trade surplus with Central America, that’s why. It’s making money, not losing money.”

Though a positive for the region, Tony Anzovino, AAPN president and chief sourcing and merchandising officer for Haggar Clothing Co., said one of the problems in the region compared to Asia—China in particular—is “the merchandising aspect, the response time, getting samples back,” though the region has made some headway in those areas.

The Western Hemisphere accounted for 6.5% of the $2.33 trillion in textiles, apparel, leather and accessories imported to the U.S. last year, Anzovino said referencing data from the U.S. Commerce Department’s Office of Textiles & Apparel (OTEXA). For apparel alone, the Western Hemisphere accounts for 16 percent of U.S. imports, whereas Bangladesh, Indonesia and India combine for 15 percent of those imports.

“It goes to show you how strong the region is,” he said.

The Western Hemisphere also accounts for 57 percent of men’s and boys mad-made fiber knit shirts, 54 percent of cotton knit shirts, 39 percent of cotton hosiery and 34 percent of cotton underwear. For the year to date through April, textile and apparel imports from the CAFTA countries increased 2.35% to $2.54 billion worth of goods, according to OTEXA. Honduras is first for the region in apparel, Mexico is second, El Salvador is third, Nicaragua is forth and Guatemala ranks fifth.

“Product is coming back, maybe not to the U.S., but we’re nearshoring–people are looking for speed and quality and consistency–and if the region can supply it at the right price,” Anzovino said. “To have something faster might be a more compliant environment.”

One key area lacking in the hemisphere, however is wovens. Particularly synthetics.

“You can find everything you need in this hemisphere, but not necessary at the right price,” Anzovino explained. “But the region is extremely strong on the knit side.”

Also among its strengths, Central America has focused on the value add it offers.

Hebe Schecter, president of Kaltex America, a 20,000-person production enterprise with operations in Mexico, Nicaragua and Colombia, noted that parent company Grupo Kaltex, Mexican-owned, vertically integrated conglomerate, has grown to be a full service textile company that produces acrylic fiber, yarn, fabrics, apparel and home textile products.

“Every time we talk to a customer, we concentrate on the value-added that our approach and the way we operate bring to them,” she said.

For men’s custom shirt company Stantt, a key to the company’s success has been finding the right factory in Honduras to produce the line.

Stantt used thousands of body scans, millions of data points and the latest 3-D modeling software to create its 99 sizes that allows for anyone to find their perfect fit using three simple measurements–chest, waist and sleeve. The factory uses cutting edge technology and equipment to craft its shirts one at a time. Stantt makes and delivers the shirts in seven days, selling its product through e-commerce and specialty retailers like Nordstrom and Mitchell’s.

“By eliminating the waste of excess inventories and errors, we are able to use the highest quality materials and make them at a great value,” Matt Hornbuckle, Stantt co-founder and CEO said.

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