The US further extended the tariff exemption period for 352 Chinese imports

The Office of the US Trade Representative announced on September 6 local time that it further extended the Section 301 tariff exemption period for 352 Chinese imports that have been restored to be exempted from tariffs and 77 Chinese imports related to COVID-19 epidemic prevention from September 30 this year to December 31.

The 352 items of Chinese goods exported to the United States and related commodities in the textile industry include: silk fabrics, woven dyed fabrics, polypropylene fibers, non-woven fabrics, etc.

This means that the Sino-US trade war has once again escalated.

What is the impact of the escalation of the Sino-US trade war on the textile industry of the two countries?

For the US side

While most American businesses are not necessarily supportive of China's trade war, there is one American industry that is cheering for him: the textile industry.

In 1999, the United States imported $8.5 billion worth of textiles and apparel from China and exported only about $176 million to China. In the nearly two decades since the United States opened up trade with China, the U.S. textile industry has shrunk dramatically, from 1.13 million in 1999 to fewer than 350,000 today, according to the Bureau of Labor Statistics.

On the other hand, the United States did not abandon its textile industry. In April 2016, the White House established the eighth NNMI program: The Center for Innovative Manufacturing of Revolutionary Fibers and Textiles, which aims to upgrade traditional textiles to a new generation of integrated and networked textiles under the guidance of the NNMI program framework. Obviously, although the US textile industry is highly dependent on China, most practitioners have begun to have a sense of crisis.

For the Chinese side

For China, textile and garment is one of the important categories of China's exports. The United States decided to impose 25 percent tariffs on 16 billion U.S. dollars of Chinese imports from August 23, 2018. From the US tax increase list, the first round of impact is the transportation, communications, electronics and machinery manufacturing industries. In the second round of taxation, the scale of taxation increased from $50 billion to $200 billion, and the scope of taxation was significantly expanded. The scope of taxation covers most of the HS double-digit sub-industries, among which chemicals, textiles and metal products account for the most HS eight-figure, accounting for 23.7%, 15.4% and 12.1% respectively. Although textiles, clothing, shoes and hats are also included in the scope of taxation, they do not account for more than 10%. Obviously, the textile and garment imported from China is still irreplaceable in the short term.

It is worth noting that China used to be the lowest cost country in the world to engage in the textile industry. But with China's rapid economic development, labor costs have nearly tripled over the past decade. This has led to increasing production costs for textile manufacturers in China. In this case, industrial transfer, flying to Southeast Asia and other countries is also a trend in recent years.

The status of the world factory remains unchanged

China's share of US imports has continued to decline significantly in recent years. In 2017, China accounted for 21.6 percent of all U.S. imports, falling to 16.5 percent in 2022 and 13 percent in January-May 2023. During the same period, Mexico, Canada, and ASEAN continued to increase their share of imports to the United States. Asean's share of US imports rose 3.1 percentage points between 2017 and 2022, in sharp contrast to China's 5.1 percentage point decline over the same period. According to official US data, in the first half of this year, China's share of US imports has been surpassed by Mexico and Canada, becoming the third largest source of US imports.

As China's third largest trading partner, the value of bilateral trade in the first eight months fell by 8.7 percent, of which exports fell by 11.7 percent, imports grew by 1.6 percent, and the trade surplus narrowed by 17.4 percent.

Since the beginning of 2023, China's exports have remained relatively strong. From January to June 2023, the cumulative growth rate of mainland China's exports was -3.2% year-on-year, although lower than Mexico's export growth rate (3.9%), but significantly better than other neighboring economies such as Vietnam (-12.1%), South Korea (-12.4%) and Taiwan Province (-18%), which all showed double-digit negative growth in exports. As a result, China's share of the global market is likely to remain stable or even strong in 2023.

On the one hand, the US import diversification strategy seems to have succeeded, on the other hand, China still plays the role of the world's factory.

What does China export to the world that solidifies its position as the world's factory? Intermediate goods are an important part of this. According to the United Nations Commodity Trade Database, China's share of global intermediate exports in 2021 will be 12.9 percent, a significant increase from 10.5 percent in 2017.

The increase in intermediate goods trade is related to industrial migration, taking the textile and garment industry as an example to observe: according to the production process, related products can be broken down into upper, middle and downstream three categories, such as cotton fiber, fabric, semi-finished products and finished products. For example, the growth rate of China's downstream exports to Vietnam is declining, while the export of midstream products is rising sharply, in this case, the downstream processing industry is likely to have moved from China to Vietnam.

Declaration: The content and template of this article are organized from the network, and the copyright belongs to the original author; If there is infringement, please inform in time and contact to delete.

Hai'an County Qinfeng Chemical Fiber Co., Ltd. specializes in production and sales：polypropylene staple fiber, Polyester Staple Fiber, functional polypropylene short fiber, functional polyester staple fiber, hydrophilic polyester staple fiber,  polypropylene, PP staple fiber, polyester staple fiber.