Levy 456% Duty! How Does The US Influence The Vietnamese Textile Industry?

Since the tightening of Sino US trade relations, many textile and garment enterprises have been turning to foreign markets such as Kampuchea, Vietnam and Pakistan. After the United States imposed tariffs on Chinese textiles, overseas orders began to flow from China to Southeast Asia, of which Vietnam was the largest. Thanks to this, Vietnam has become one of the three largest exporters of textiles and clothing.

In 2018, Vietnam's textile and garment exports increased by 16.01%. Among them, textile and garment exports amounted to US $28 billion 780 million, up 14.45% over the same period last year. Fabric exports amounted to US $1 billion 660 million, an increase of 25.5% over the same period last year. The export volume of textile and garment raw materials reached US $1 billion 230 million, up 14.59% over the same period last year. In the first quarter of 2019, Vietnamese clothing exports amounted to US $7 billion 300 million, an increase of 13.3%.

Recently, the United States announced a 456% tariff increase on Vietnam. With this news coming out, many people are worried about whether the United States is going to launch a trade war with Vietnam. In fact, the United States has imposed tariffs on countries such as China, the European Union, Canada, Mexico and Turkey. Then, if the United States starts a trade war, how much will the United States impose tariffs on Vietnamese textiles and how much will it affect China's textile and garment enterprises?

If the US Vietnam trade war brings China Textile Enterprises' influence

Vietnam now has more and more textile enterprises, and Vietnam's cost is low, and its fabric price is lower than that of China. Therefore, many international terminal apparel manufacturers have transferred their orders from China to Vietnam. If the United States increases tariffs on Vietnam, then Vietnam's fabric and clothing prices will no longer dominate. By contrast, the quality of China's fabrics and clothing is better than that of Vietnam. I believe there will be many terminal garment manufacturers to reorder their orders to China.

On the other hand, the textile industry in Vietnam is dominated by conventional low-end fabrics, and the price is lower than that of China, thus causing impact on domestic conventional low-end products. If the United States increases tariffs on Vietnam, then Vietnam's fabric and clothing prices will no longer dominate. The demand for conventional low-end products is bound to return to China, thereby easing the overcapacity of domestic grey cloth.

The transfer of textile and garment enterprises is normal. China's domestic textile enterprises are mainly transferred from the Jiangsu and Zhejiang provinces to the central and western regions. At the same time, the textile and garment industry has been internationalized, transferring capacity to Southeast Asia, South Asia, Central Asia and Africa, and also in the developed countries and regions, such as Europe, America and Japan, to control the raw materials, design, R & D, brand and market channel resources at the two ends of the textile industry through mergers and acquisitions. If the United States increases tariffs on Vietnam's textile imports, it will eventually affect Vietnam's textile and apparel orders, so it will speed up the development of textile and garment enterprises in Southeast Asia, South Asia, Central Asia and Africa, and more orders will be transferred to the international arena and form fierce competition with China.

In the past two years, under the trend of environmental protection, many textile enterprises in China have moved their factories to Vietnam. In the early stage, the cost of factory rent, workers' wages and dyeing fees were lower than that in China, attracting many domestic textile enterprises. However, those factories that go to Southeast Asia to set up factories face too many problems, such as the soaring cost of workers, frequent activities of safeguarding rights and imperfect infrastructure facilities, which restrict the development of enterprises. If the United States increases tariffs on Vietnam, another factor will affect the enterprises that go to Vietnam to run factories. When labor costs and policy advantages no longer exist, they may be faced with bankruptcy or relocation of enterprises.

The US tariffs on Vietnam will have a great impact on China's textile industry. Therefore, textile workers are very concerned about whether the United States will impose tariffs on Vietnam. If it is added, does it involve textiles? We don't know the answer, nor can we anticipate it. Let's take a look at the current situation of China's textile enterprises and do well in the domestic market in order to do well in the foreign market.

Since July, in the off-season, fabric producers in Wujiang lack bulk orders, mostly small ones. Weaving factories are slowly moving goods, and grey fabric inventory is still at a high level. A person in charge of textile enterprises in Wujiang has revealed that the domestic orders are acceptable this year, but foreign trade orders are few, which is 80% less than in previous years. The Guangzhou area is the spot product enterprise gathering place, but these enterprises' situation is also not optimistic. It is understood that since the summer off-season, there are many spot products of the retail department nobody cares, has closed down. At present, textile enterprises are difficult to receive foreign trade and have large stock pressure, and are restricted by many factors, such as rising labor costs, fluctuation of raw material prices, and raising the interest rate of loans.

Upstream polyester manufacturers, mainstream production and marketing from time to time, but not for a long time. Recently, the mainstream production and marketing in the downstream polyester market has been plummeting, and production and sales have basically remained at 1-2 level for three consecutive trading days. Weaving enterprises stop replenishment, traders are cautious. From the statistics of China silk net, polyester stock market has increased to 10-19 days. Polyester raw materials manufacturers are affected by downstream products, and polyester factories have begun to stop production and maintenance. The subsequent polyester market has reduced production operations or increased further.

THE END

No matter whether the US Vietnam will open trade war, the demand for clothing fabric orders to China may be reduced. But China, as the largest and most complete industrial system in the world, has the largest and most complete industrial system from raw material supply, design research and development to textile dyeing and finishing. It will still be a major exporter of textile and clothing in the world, and the basic demand is still there. Therefore, regardless of the international trade situation, China's textile enterprises need to upgrade and upgrade their products and enhance their competitiveness so as to better develop in a long-term way.