These days, it’s difficult for your news source not to discuss a topic related to the Trump Administration. You couldn’t avoid it even if you tried.
The latest topic of debate is on trade tariffs between China and the USA. Tariffs are essentially the fees associated with importing goods from one country into the other. This is usually a trade tactic countries adopt in order to protect their domestic industries, encourage consumers to buy local, and avoid market competition of goods they know their economy depends on. Higher import tariffs also push businesses and consumers to buy from alternative sources. The higher the import tax for a good to enter a country, the higher the price of that good will be in that country in order for the importing company to make up the difference. The most ethical way to cover these import tariffs would be for the importing company to balance its fees internally and lower the salaries of senior staff and executives. Looks good on paper, doesn’t it? However, we are well aware by now that in this capitalistic world we live in, this rarely happens. Instead, companies will look into lowering the costs in their supply chain.
With the constant back and forth threats and retaliation between China and the USA on their war on import tariffs, the Trump administration expanded its initial tariffs to include approximately $200 billion worth of goods, including consumer products like clothing and apparel accessories. The problem is that China is essential to the apparel industry and virtually all textile and apparel companies have some business with China. What will soon happen as a direct result of these increased tariffs is that companies will shift their production and sourcing out of China and into other countries that aren’t as heavily taxed and where labor laws are often sub-par. This happens in India, Bangladesh, Vietnam, Pakistan and of course, Cambodia. Companies will scramble to cut costs which often leads to sourcing outside of regulated factories where slave traders can thrive and garment workers voices and rights are suppressed.
On February 19, 2016, Ambassador Heidt visited Cambodian Textiles Worldwide (CTW) in Phnom Penh
©U.S. Embassy photo by Yarat
This is the risk we are already facing here in Cambodia. The garment industry here moves a tremendous amount of money (billions annually) and accounts for 95% of the country’s exports. However, 90% of the factories owners and 80% of the factory managers here are not Cambodian but rather Chinese, Taiwanese, Malaysian or South Korean. With most of the revenue in the hands of a foreign few, cutting costs will affect the garment workers first and foremost. Corruption and government involvement to support factory owners are well known and police protection outside factory gates supports that.
Another effect this trade war can have is to accelerate the process of manufacturing automation in the garment industry. This means changing how clothing is made and who makes it. According to The Fast Company “When the Chinese clothing manufacturer Tianyuan Garments Company opens its newest factory in 2018, it will be in Arkansas, not China, and instead of workers hunched over sewing machines, the factory will be filled with fully autonomous robots and their human supervisors. Once the system is fully operational, each of the 21 production lines in the factory will be capable of making 1.2 million T-shirts a year, at a total cost of production that can compete in terms of cost with apparel companies that manufacture and ship clothing from the lowest-wage countries in the world.” Historically, humans have relied on manufacturing as a source of steady low skilled work but as technology is soon making these jobs obsolete, developing countries such as Cambodia will have to seriously shift their industry dependence and provide their people with new opportunities.
SoftWear’s technology uses computer vision to watch and analyze fabric so the system can move the material while sewing. ©SoftWear Automation
So, as the Trump administration wants to punish China with these trade tariffs, the ripple effect is actually much larger for garment workers across the globe. As consumers of fashion and apparel products, we invite you to be mindful of your purchases and support brands that provide transparency in all aspects of their supply chain: the more people who ask #whomademyclothes, the more brands will listen.
From Cambodia, with love.