Fashion Intel & Analysis
This week in an open letter to the Cotton Campaign (a coalition of human rights groups, fashion brands and retailers, and associations including USFIA), the Uzbekistan Ministry of Labor calls for an end to the boycott of cotton. The pledge to boycott Uzbekistan cotton began in 2007 due to the systemic use of forced labor in the cotton fields, and includes 305 global apparel brands and retailers. While there certainly has been substantial improvement in the labor practices in Uzbekistan, the response from the Cotton Campaign says more needs to be accomplished before the pledge will be lifted. "We recognize and are heartened by the progress that Uzbekistan has made toward ending forced labor, and members look forward to considering sourcing from Uzbekistan. However, given brands’ zero tolerance policies on forced labor, anti-slavery legal requirements, and the ILO’s findings that more than 100,000 cotton pickers worked under forced labor conditions in 2019, brands need additional assurances of worker protections. Despite the ongoing global pandemic, these assurances are essential for our members."
The U.S. Security and Exchange Commission (SEC) issued a statement urging public companies to disclose “as much information as is practicable regarding their current financial and operating status” in the coming weeks as public companies issue earnings releases and conduct investor calls. The statement from SEC Chairman, Jay Clayton, and the Director of the Division of Corporate Finance, William Hinman, offers several observations and requests. Clayton and Hinman noted that a “full-mitigation response to COVID-19” is only possible with “constant coordination among workers, consumers, businesses, governmental authorities and investors, both broadly and at the individual and firm-specific level.” They also asked that companies disclosures include “(1) where the company stands today, operationally and financially, (2) how the company’s COVID-19 response, including its efforts to protect the health and well-being of its workforce and its customers, is progressing, and (3) how its operations and financial condition may change as all our efforts to fight COVID-19 progress. Historical information may be relatively less significant. You can read the full statement here.
A letter to the editor published in The Diplomat calls for the Trump Administration to end punitive Chinese tariffs in light of COVID-19. Analysts estimate 80 million American jobs will be affected by COVID-19, and the economic impact will be long-lasting. In light of this, the bipartisan group of officials urge the Trump Administration to “immediately suspend indefinitely all remaining punitive tariffs imposed since it took office, as should those governments that levied retaliatory tariffs on U.S. goods and services.” The letter shares the concerns of these officials that U.S. government data shows the worldwide U.S. merchandise trade deficit has grown under the Trump Administration, U.S. manufacturing jobs are still being lost, and American households are paying more for consumer goods as a result of punitive tariffs.
The letter was written by David Firestein, president and CEO of the George H. W. Bush Foundation for U.S.-China Relations, Bob Holden, chairman and CEO of the U.S. Heartland–China Association, Mark Kirk, a former Republican U.S. senator from Illinois, and Dan Slane, former chairman of the U.S.-China Economic and Security Review Commission and a former senior member of the Trump transition team.
In a new article, Dr. Sheng Lu of the University of Delaware analyzes the latest U.S. apparel import data from the Office of Textiles and Apparel (OTEXA) at the U.S. Department of Commerce. During the month of February, U.S. apparel imports fell 11.2% from 2019. Between January 2020 and February 2020 U.S. apparel imports fell 10.9%, which is nearly the same loss in response to the 2008 financial crisis. While the trend of companies diversifying their sourcing bases outside of China has contributed to a gradual decrease in China’s market share of U.S. apparel imports, in February there was a sharp drop to 21.3%, which is a record low. Much of the market share lost by China has been picked up by other Asian suppliers including Vietnam and Bangladesh.
According to new data from Tariffs Hurt the Heartland, the trade war has cost Americans nearly $56 billion since the trade war began. In February alone, American consumers paid $5 billion in tariffs. Americans for Free Trade, which represents a broad range of American businesses and trade associations said “Tariff relief is long-overdue and more critical than ever before. American companies are struggling to stay in business amid the COVID-19 outbreak and farmers are declaring bankruptcy. The time is now for the Trump Administration to provide liquidity to companies who desperately need it. The administration must lift all tariffs, not just Most Favored Nation (MFN) tariffs, in order to stimulate the economy and help American businesses and farmers."