A great threat of economic slowdown is looming all over the world because of the ongoing trade war between US and China.
Among the unilateralism and trade protectionism, some countries are witnessing a boost in exports to these countries, among them is the Southeast Asian nation Indonesia.
The footwear exports from the country to US are seeing a notable surge from past few months. In the first four months of fiscal 2019, Indonesia exported footwear worth US $ 559.91 million to the US, up by 6.7 per cent from a year earlier.
The Indonesian Footwear Association also reveals that country’s exports last year took a jump of 6.5 per cent, higher than 3.5 per cent increase from 2017. Of that, exports to the US gained more than 4.7 per cent to US $ 1.55 billion last year, compared with the 3.5 per cent rise in 2017, based on data from the US commerce department.
Around 30 per cent of the total trade of Indonesia is from the US and China, around 10 per cent with the US and around 20 per cent with China.
Analysts predict that Indonesia’s footwear exports would grow from US $ 5.3 billion in 2018 to US $ 6.5 billion this year, or 23 per cent rise, and are expected to reach US $ 10 billion within the next four years. The prime reason is the shifting of supply chains shift from China’s manufacturing base to Indonesia.
Southeast Asian countries and South Korea in footwear and garments, and Taiwan in machinery and equipment and other countries such as Vietnam, India and Bangladesh have filled the lacunae by taking up about 88 per cent of the US market share lost by China.
Major American fashion and footwear companies based in China such as Crocs, Caleres and Deckers are also mulling over relocation to avoid tariffs and business losses.
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