On May 9, 2019, the US government announced that since May 10, 2019, the tariff rate imposed on the $200 billion list of goods imported from China has been increased from 10% to 25%.

As a counterattack, on May 13, the State Council Tariff Commission decided to increase the tariff rate on the US$60 billion list of US goods that have been subject to tariff increases since 0:00 on June 1, 2019. Implement tariffs of 25%, 20% or 10%.

According to the "People's Republic of China Foreign Trade Law", "People's Republic of China Import and Export Tariff Regulations" and other laws and regulations and the basic principles of international law, the State Council Tariff Commission decided that since 0:00 on June 1, 2019, the part originating in the United States Imported goods will increase the tariff rate. The relevant matters are hereby announced as follows:

1. To increase the tariff rate of some of the commodities in the "Notice of the Customs Tariff Commission of the State Council on the Implementation of Customs Duty on Imports of About US$60 Billion of Imported Goods from the United States" (No. 8 of the Taxation Commission [2018]), in accordance with The State Council Customs Tariff Commission's Circular on the Notification of Adding Tariffs to Certain Imported Commodities Originating in the United States (Second Batch) (TAC Announcement [2018] No. 6) is implemented at the tax rate. Namely: 2,493 tax items listed in Annex 1 shall be subject to a 25% tariff; for 1078 items of tax items listed in Annex 2, a 20% tariff shall be imposed; and 974 items of tax items listed in Annex 3 shall be imposed. A 10% tariff is imposed. For the 595 items of tax items listed in Annex 4, a 5% tariff is still imposed.

2. Other matters shall be implemented in accordance with the Notice of the Taxation Committee [2018] No. 6.

A new batch of $300 billion tariff list in the US

After the tariff increase of 200 billion US dollars, the US will add another batch of 300 billion list, and the list has been officially released.

On May 13th, the US Trade Representative Office (USTR) announced that it would issue a 25% tariff on about $300 billion in Chinese goods for public comment and hold a public hearing. The USTR also publishes a taxation list covering 3,805 products in the annex.

The USTR will hold a public hearing on this list on June 17 and stop submitting written comments. USTR requires the submission of public hearing evidence and materials by June 10th and the collection of opinions on June 24. It is worth noting that the time limit for soliciting opinions is significantly shorter than the time limit for soliciting levies on Chinese goods. It is expected that the customs duties will be officially started after the hearing.

The United States imposes tariffs and has limited impact on Chinese textiles.

On May 10, the United States added a 25% tariff to the US$200 million worth of tariffs. The textile industry involved textile yarns, fabrics, industrial finished products and some home textiles. The export value is 4 billion US dollars.

For the Chinese textile industry, which exports more than 270 billion US dollars a year, the US$4 billion accounted for less than 2%. Overall, the impact on China's textile industry exports is not that great.

On the contrary, China's exports of textiles and clothing accounted for about 37% of US imports. With such high market dependence, it is difficult for the United States to find an alternative source of equivalent volume, and eventually it will be paid by American consumers.

Liang Xi, an analyst at Haitong Securities, believes that the $200 billion list has limited impact on the textiles sector. Among the 200 billion US dollars of Chinese merchandise list, the textile and apparel sector related products include silk, animal wool yarn and its fabrics, cotton, knitted hook fabrics, hats, decorations and leather products, and China’s exports to the United States. Larger woven garments, knitwear and home textile finished goods are not on the list.

From the industry level, the main products involved in the export of the United States in 2018 totaled 9 billion US dollars, accounting for 8.3% of China's exports, accounting for 3.3% of China's overall textile and apparel exports, thus judging the proportion involved, and part Exports can be transferred.

Vietnam will form a certain substitution for China's textile exports

Liang Xi analyzed that Vietnam, as a representative of low-cost Southeast Asian countries, has a certain substitution effect. The increase in the US tax rate, or the acceleration of some orders to the low-cost Southeast Asian countries represented by Vietnam, has analyzed the correlation between the export of goods from Vietnam, Bangladesh and Cambodia to the United States and the growth rate of Chinese goods to the United States in a single month. The data show that from June 2018 to February 2019, the correlation coefficient between the three and China's exports to the US in a single month is -0.76, -0.24, 0.38, respectively. The negative correlation between Vietnam and China is significantly stronger than other. The country, Liang Xi believes that mainly due to Vietnam's recent acceptance of some domestic manufacturing orders, China's exports have formed a certain alternative.

China's textile and apparel exports cannot be completely replaced in the short to medium term

As of now, China still has a significant industrial chain advantage. When the international trade environment is loose, it will still be the preferred destination for export destination countries. It cannot be completely replaced in the short to medium term. The main reasons are:

First, in 2012-2017, China has always been the world's largest exporter of textiles and garments, accounting for 35.3% in 2017, up 1.7pct year-on-year, higher than the second EU 27.9pct;

Second, Vietnam's textile raw materials mainly rely on imports. According to USDA data, Vietnam's cotton imports accounted for more than 80% of its total supply in 2011-2018, which may cause certain risks to the delivery of products;

Third, short-term production is difficult to transfer quickly. The negotiations between enterprises and local governments and suppliers, as well as the agreement on delivery and product quality, need time to stabilize.

Li Chao, a researcher at Huatai Securities, admits that because the industrial chain transfer has certain difficulties in the short term, export companies may choose to negotiate micro-level prices with suppliers and US buyers. The impact of US tariff increases on China's exports and GDP is not immediately apparent in the short term, so this will be a slow process.

Talk, the door is open;

On the evening of May 13, "News Network" broadcasted an international critical review "China has prepared for a comprehensive response" to screen!

The anchor Kang Huizhen vigorously read an "international sharp review", which mentioned:

For the trade war initiated by the United States, China has long indicated its attitude: it is unwilling to fight, but it is not afraid to fight. If necessary, it has to be played. In the face of the soft and hard hands of the United States, China has already given the answer: talk, the door is open; fight, to accompany the end. After all the 5,000 years of ups and downs of the Chinese nation, what kind of battle has not seen? ! In the great process of realizing national rejuvenation, there will inevitably be difficulties, obstacles and even storms. The US-sponsored trade war with China is just a hurdle in China's development process. It is no big deal. China will surely strengthen its confidence, overcome difficulties, turn crisis into opportunity, and fight for a new world.

How does the textile industry deal with Sino-US trade frictions?

As a pioneering industry in the Chinese economy, how does the textile industry deal with Sino-US trade frictions? The same is to do your own thing. Sun Ruizhe pointed out that the new development of China's textile industry transformation and upgrading is manifested in three aspects: manufacturing intelligence, channel diversification, and responsibility globalization. China's textile industry will continue to focus on technological innovation, focusing on basic research in emerging fiber and high-end equipment, and at the same time cross-border cooperation to transform innovation into other areas such as health care, safety protection, eco-environment, transportation and environmental protection, and aerospace infrastructure. At the same time, it will also play a leading role in fashion and culture, strengthen brand building; be responsible-oriented, green development, taking into account human responsibility, environmental responsibility, and market responsibility; in addition, we must integrate resources to form industrial synergies and build world-class advanced Industrial clusters.

Hai'an County Qinfeng Chemical Fiber Co., Ltd. relies on the professional power of single stream, the front-end quality inspection system and perfect quality inspection system ranks among the high-quality enterprise queues in the industry, specializing in the production of short pp, polypropylene staple fiber, polyester staple fiber and Functional polypropylene staple fiber, etc.