Honduras to gain from US tariff on Chinese MMF jerseys & pullovers

Table 1: Key Exporting Countries and Trade Statistics—Man-Made Fibre-Based Jerseys and Pullovers in CY 2024

Source: TradeMap and F2F Analysis, *Effective March 4, 2025

Note: RCA - Revealed Comparative Advantage; UVR - Unit Value Realisation; LPI - Logistic Performance Index

Figure 1: Key Exporting Countries and Trade Statistics- Man-Made Fibre-Based Jerseys and Pullovers in CY 2024

China – Leading exporter but facing challenges

Despite being the leading exporter, China’s man-made fibre-based jerseys and pullovers face challenges, particularly with its relatively low Revealed Comparative Advantage (RCA) of 1.49. This indicates that while China remains a dominant player, its competitiveness is lower compared to some other countries. The tariff rate of 6 per cent (till February 3) also poses a potential risk, making it more expensive for US consumers, which could affect demand. China’s low UVR, a key measure of product quality, also shows that its products are typically low-cost and mass-produced.

Along with this, the imposition of the additional 20 per cent tariff on China from March 4 is set to create additional trade boundaries for Chinese apparel products. China had enjoyed its popularity, particularly due to its low cost, which would now be lost due to increased UVR.

With the first tariff imposition on February 4th, 2025, the tariff rate increased to 16 per cent. This increase in tariff would cause the UVR to rise as production and export costs escalate. As a result, the UVR would likely increase to around $12.3/kg, reflecting the growing challenges posed by the higher tariffs. The increase in the UVR indicates that the cost-effectiveness of the products is starting to diminish, making them less attractive to price-sensitive consumers.

In the second tariff imposition, effective from March 4, 2025, the tariff rate rose even further to 26 per cent. This significant rise would push the UVR closer to $13.5/kg or higher. The higher tariff burden will further limit the ability to offer affordable products, pushing them into a higher-priced segment and reducing their competitiveness in price-sensitive markets.

Vietnam – Strong growth but limited cost competitiveness

Vietnam is a significant exporter of man-made fibre jerseys and pullovers, with a growing market share in the US. Although the country’s RCA is strong at 3.81, showing a good comparative advantage, its UVR is much higher than China’s, indicating that its products are sold at a premium. This higher price point could limit Vietnam’s ability to capture a larger share of the cost-conscious segment, particularly as tariff rates remain at 6 per cent. Vietnam also tops the list as one of the beneficiary countries amidst China’s tariff imposition due to its economies of scale combined with an LPI of 3.30, second only to China.

Honduras – High comparative advantage and zero tariffs

Honduras stands out with a remarkable RCA of 54.32, indicating an extremely high comparative advantage in man-made fibre-based jerseys and pullovers. This competitive edge is coupled with a tariff rate of zero per cent, allowing Honduran exports to the US to be particularly cost-effective. With a moderate UVR of $12.17/kg, Honduras is positioned to be a strong competitor, especially for buyers seeking lower-priced products without compromising on quality. Honduras is a clear winner in the scenario given President Trump’s attention on increasing tariffs on major economies including China and Vietnam.

Despite its low LPI of 2.90, Honduras may still benefit from reduced trade costs due to its well-established, short-distance trade routes to the US.

Jordan – High RCA but premium pricing

Jordan’s man-made fibre jerseys and pullovers exports are backed by a very high RCA of 70.34, signalling a significant advantage in the production and export of these garments. However, with a UVR of $28.92/kg, Jordan’s products are positioned at the higher end of the market, which could limit their appeal to more price-sensitive consumers. The zero per cent tariff rate, however, ensures that Jordan remains highly competitive in the US market, especially among consumers willing to pay a premium for quality.

Indonesia – Moderate competitiveness with high pricing

Indonesia has a moderate RCA of 5.65, but the high UVR of $23.74/kg suggests that its man-made fibre-based jerseys and pullovers are sold at a higher price point compared to some competitors. Despite the tariff of 6 per cent, Indonesia’s products still face stiff competition from lower-priced suppliers, particularly China. However, Indonesia’s steady export growth shows that it can carve out a niche for higher-quality products.

Future outlook

As global trade dynamics continue to shift, Honduras is poised to be the primary beneficiary in the man-made fibre (MMF) jersey and pullover market. The country’s exceptional RCA of 54.32, combined with the zero per cent tariff rate, positions it as a highly cost-effective supplier, especially in the US market where price sensitivity is a major factor. While countries like China and Vietnam have faced increased tariffs and price hikes due to rising UVR, Honduras’ ability to offer quality products at competitive prices will make it a top choice for buyers seeking affordable MMF garments without sacrificing durability or comfort. As the demand for activewear and casual clothing continues to grow, Honduras is well-positioned to capture significant market share, leveraging its favourable trade terms and strong market positioning.

On the other hand, China, while still a major player in MMF-based jerseys and pullovers, will experience a slight erosion in competitiveness as a result of higher UVRs due to the rising tariff impositions. As China’s UVR climbs, its traditionally low-cost advantage will diminish, making its products less attractive to price-conscious US consumers. The imposition of higher tariffs will further accentuate this challenge. Vietnam, while benefiting from strong growth, also faces a similar issue with a higher UVR, limiting its ability to compete on cost. In contrast, Honduras will remain a key beneficiary in this scenario, with its lower production costs and zero tariffs making it the clear leader in providing competitive, quality MMF garments to the US market.

Fibre2Fashion News Desk (NS)