Fashion Intel & Analysis

On another operational update call, Executive Assistant Commissioner Todd Owen at U.S. Customs and Border Protection (CBP) says the migrant situation continues to increase at the southern border and the ports of entry continue to face negative impacts.

The two most important updates are about wait times and the Pharr bridge.  CBP says there was a decrease in cargo wait times this week at the ports of entry. Owen credited the improvement partially to the return of officers to the field offices, but more so to less cargo crossing the border because it is Holy Week.

Due to safety concerns, Mexican authorities and bridge operators have made the city of Pharr, Texas commercial trucks-only crossing for the near term. CBP is hoping this decision may relieve congestion by having more capacity at Pharr bridge for commercial cargo.

As a reminder, 545 officers were initially pulled from the southwest border ports of entry to assist border patrol. This past Sunday, April 14th, 100 officers from the northern border, airports, and seaports were deployed to the southwest border allowing 40 officers to return to the El Paso field office and 60 officers to return to the Laredo field office. The next wave will pull approximately 125 officers from northern borders, airports, and seaports on April 28th and the final wave will pull about 75 officers on May 12th. Right now, there is little impact by pulling officers from the northern border, airports, and seaports, but as the numbers increase so could the impacts.  

The EU has responded to last week's announcement by the Trump Administration asking for comments about what EU products should be targeted in any retaliation based on the World Trade Organization (WTO) decision in the Boeing-Airbus aircraft subsidy case. Yesterday, the EU threatened to impose tariffs on $20 billion worth of U.S. imports. The full list is available here and open for public consultation until May 31.  There are a number of consumer products on the list, including briefcases, handbags, and traveling bags in Chapter 42 and cotton in Chapter 52.

Yesterday, the U.S. International Trade Commission (ITC) released a report assessing the likely impact of the United States-Mexico-Canada Agreement (USMCA) on the overall U.S. economy and on specific industry sectors.  This report is required under the terms of Trade Promotion Authority and means that now the Administration and the Congress can start moving forward to draft the implementing legislation. 

The report’s findings estimate USMCA would raise U.S. real GDP, increase U.S. employment, and likely have a positive impact on U.S. trade, both with USMCA partners and the rest of the world.  We are pleased that USFIA President Julia Hughes’ testimony about the Impact of USMCA, as well as the 2018 Fashion Industry Benchmarking Study released in conjunction with Dr. Sheng Lu of the University of Delaware, were two resources cited by the ITC when analyzing how USMCA will impact the textile and apparel sector.

The ITC findings highlight the key USMCA provisions for textiles and apparel, including altering certain rules of origin, modifying chapter rules for goods classified in HTS chapters 61 and 62 (knit and woven apparel), and maintaining the NAFTA TPLs. The report concludes the technical modifications in USMCA are important to manufacturers and importers of textiles and apparel and would affect sourcing patterns, but the updates are not likely to alter the overall utilization of USMCA’s duty-free provisions.  

Last week, the Mongolia Third Neighbor Trade Act was introduced in both the House and the Senate. The legislation would offer duty-free treatment to imports of Mongolian cashmere that do not compete directly with any U.S. products. The bill was introduced by Senators Ben Cardin (D-MD) and Dan Sullivan (R-AK) and Representatives Ted Yoho (R-FL) and Dina Titus (D-NV). “The Mongolia Third Neighbor Trade Act not only reaffirms the importance of this bilateral relationship, but also aims to enhance our ties and bolster industry in this growing democracy in the Indo-Pacific,” states Sullivan in a press release following the reintroduction. Rep. Yoho adds, “It is estimated that this simple act will create upwards of 40,000 jobs primarily for women who make up ninety percent of the garment industry in Mongolia.” To read the full press release, click here.

The Wall Street Journal is reporting progress in the U.S.-China trade talks and released a tentative schedule of two rounds of face-to-face meetings to finalize a trade deal concluded by a signing ceremony in late May or early June, “according to people familiar with the situation.” 

The article reports U.S. Trade Representative Robert Lighthizer plans to travel to Beijing the week of April 29, and Chinese envoy Liu He will arrive in Washington the week of May 6. Treasury Secretary Steven Mnuchin will also be involved in the delegation to China. If talks continue to progress, as suggested lately, U.S. and Chinese officials will finalize the agreement’s text and legal language and hope for a presidential signing ceremony as soon as Memorial Day. A U.S. trade official declined to confirm the tentative schedule. We will keep you posted as the official timeline is released.