Global fashion companies are accelerating plans to diversify their manufacturing operations away from China to Southeast Asian countries including Vietnam and Cambodia due to the threat of US tariffs on Chinese imports, Bloomberg reports.
Nearly 70% of fashion industry executives say they plan to reduce the percentage of their products sourced from China over the next two years and name US trade protectionism as the largest challenge facing the industry, according to a recent study by the US Fashion Industry Association.
Cambodia is particularly attractive to many companies because it has retained tariff-free access to the American market for many products.
Steven Madden already makes 15% of its handbags in Cambodia and plans to double this percentage by 2019, the company’s CEO Edward Rosenfeld said during a recent earnings call.
“That gives us frankly about a three-year head start on most of our peers, because many folks are just now trying to make that move,” Rosenfeld said.