International Observation: The Market And Inflation Force The United States To Cancel The Tariff On China

In 2018, trump announced that the United States would impose tariffs on China's goods, and announced the list of tax increases in three batches, of which textiles and clothing were not included in the first and second lists; However, in the third batch of list on July 10, 2018 (the United States announced to impose a 10% tariff on 200 billion goods from China), the list of textiles and clothing was very impressive. Among them, more than 1000 items were affected, mainly textiles (HS 50-60) and hats (HS 65), such as textile raw materials, yarns, fabrics, carpets, industrial textiles, leather, etc, This policy will take effect on September 24, 2018; Subsequently, it was announced on May 10, 2019 that the tariff on the third batch of more than 200 billion US dollars of Chinese goods will be increased from 10% to 25%. So far, the textile industry in the upstream of China's industrial chain has been deeply affected, and the global textile supply chain system has also changed greatly.

Tariff increases, US textile and garment orders transfer, and China's market share declines significantly

In 2017, the United States imported 105.9 billion U.S. clothing, including 38.6 billion U.S. dollars from China. China accounted for 33.67% of the total imports, of which 27.53% were pure cotton garments, belonging to the largest import market of the United States; However, after the change of Sino US economic and trade relations, the United States began to guide the market to reduce its dependence on China's textiles and clothing. As a result, the proportion of textiles and clothing imported from China decreased significantly in the following years. The data shows that (as shown in Figure 1), China's market share of textiles and garments imported from the United States decreased from 36% in 2018 to 27.18% in 2021, and China's market share in the United States decreased by 7.83% in three years.

In addition, India and Southeast Asian countries have obviously occupied the US market. Specifically, during 2017, the market share of Vietnam, India and Bangladesh in the United States was 8%, 11% and 7%, respectively, while the market share of South, India and Bangladesh in the United States textile and clothing market increased to 10%, 13% and 11% from January to march in 2022, especially the market share of Bangladesh increased by 4% in the past three years.

The tariff increase has little effect on the export amount of China's textiles and garments, but the share of the US market has decreased significantly

Before the tariff increase, that is, in 2017, according to the statistics of China's customs, China's export of textile, clothing and raw materials to the United States totaled US $45.64 billion, accounting for 16.9% of China's total export amount of textile, clothing and raw materials in 2017; The impact of the tax list on China's textile and clothing exports to the United States is about 10.3 billion US dollars, accounting for 22.6% of China's textile and clothing and raw materials exports to the United States, and 3.81% of China's textile and clothing exports.

To sum up, although China's textile and garment export value has increased in recent years, it is supported by the appreciation of RMB and the rise of yarn unit price; From the data of the United States, the United States imposed tariffs on China's textile products, resulting in a significant decline in China's share of the US textile market. In the past year, China's overseas textile and clothing orders have shifted to Southeast Asian countries, India, Bangladesh and other countries. China's export orders have significantly decreased, and downstream consumption has been affected. In the future, if the United States cancels tariffs on China, and the current overseas market cotton and cotton yarn prices are higher than the Chinese market, there is a greater possibility of order backflow; However, due to the rapid return of Southeast Asia and other countries, it is difficult to upgrade the proportion of textile industry to India and other countries in recent years.