Sino US trade war and China's textile exports will be hit
At 12:30 a.m. Beijing time on March 23, President Trump signed a presidential memorandum, imposing large-scale tariffs on goods imported from China and restricting Chinese enterprises'investment and mergers with the United States based on the "301" survey results. At last, the United States launched a long Sino US trade war against China unilaterally.
According to the memorandum signed that day, the Office of the United States Trade Representative will formulate a specific tariff plan for Chinese goods within 15 days. Meanwhile, the US trade representative's office will also prosecute China for the relevant issues to the world trade organization. In addition, the US Treasury will introduce a plan within 60 days to restrict Chinese enterprises from investing in mergers and acquisitions in the US. Earlier in the day, White House officials said at a briefing that Chinese goods involved in taxation were worth about billion. President Trump later said that this was just the beginning, and that the price of Chinese goods involved in taxation would actually exceed billion.
The office of the United States trade representative announced last August that it launched a "301 investigation" against China. The so-called "301 survey" comes from the 301st Trade Law of the United States in 1974. The article authorizes US trade representatives to initiate investigations into "unreasonable or unfair trade practices" of other countries and, after the investigation, to recommend unilateral sanctions imposed by the US President, including the withdrawal of trade preferences and the imposition of retaliatory tariffs. The survey was initiated, investigated, ruled and implemented by the United States itself, with strong unilateralism.
According to a study released recently by the American Information Technology Innovation Foundation, if Trump government imposes a 25% tariff on information and communication technology products imported from China, it will lead to a loss of about 2 billion in the next 10 years for the U.S. economy. If you are engaged in the following industries: textile and clothing, shoes and hats, mechanical electronics, furniture and toys, steel industry, and products just exported to the United States, then the Sino-US trade war will certainly affect your orders.
Why? Let's take the textile and garment industry as an example.
1, the United States is China's largest exporter of textiles and clothing.
China is the largest exporter of textiles and clothing in the world. At the same time, textiles and clothing export is also an important part of China's trade exports. Textile and garment exports account for about 13% of China's total foreign trade. The top 10 export markets of textiles and apparel in China are 17% in the United States, 8% in Japan, 6% in Hong Kong, 5% in Vietnam, 4% in Britain, 3% in Germany, 3% in Korea, 3% in Russia, 2% in the Philippines and 2% in the United Arab Emirates.
In the 10 largest markets before China's textile and clothing export, the United States took the first place. In 2017, China accounted for 15.5% of the total exports of textiles and clothing to the United States. From the perspective of export structure, garment exports accounted for 73% in 2017 and textile exports for 27%.
China and the United States have huge trade surplus in textile and clothing trade. In 2017, China's textile and apparel trade totaled 293.15 billion US dollars, of which 268.6 billion US dollars were exported, 245.5 billion US dollars were imported and a total trade surplus of 244.5 billion US dollars was accumulated. The surplus is that we sell more products to the United States than the United States sells to us, earn their money, occupy their market and rob them of their jobs. So Trump will never let go of China's textile and garment industry.
2, trade war will lead to the shift of orders, which will adversely affect China's textile and garment industry.
Textile and garment industry is a labor intensive industry, which can solve many people's employment. Although Trump hated to be unable to bring the industry back to the United States, but helplessly, the United States textile and garment industry is shrinking, labor costs are too high, the possibility of returning to the United States in the short term is low. If China and the United States fight trade wars, the United States will raise tariffs on textiles and clothing to deal with China. In textile and apparel, household appliances, some personal durables and furniture decoration industries, China's exports account for a relatively high proportion of private consumption in the United States, and tariff increases will have a greater impact. At present, the US tariffs on these industries are not very high. For example, tariffs on common Chinese clothing products are generally about 10-20%. If tariffs on these products are raised to 45%, they will have a greater impact on exports. The United States has many trading partners. Besides China, it can purchase from Vietnam, Mexico, India and other places. It is easy to transfer orders.
The main importing countries of textiles and clothing in the United States are China, India, Vietnam, Pakistan, Mexico, Bangladesh, Indonesia, South Korea, Honduras and Canada. In 2015, China, Vietnam, India and Mexico accounted for 37.25%, 9.43%, 6.68% and 4.52% of the top four textile and apparel exports to the United States, respectively. China has an absolute advantage. Vietnam, as the second largest textile and apparel import market in the United States, is most likely to undertake the transfer of orders because of its relatively perfect industrial matching, low production costs and abundant labor force. With reference to the development process of China's textile industry, some professional organizations have estimated the total export scale of Vietnam's textile and apparel industry, which will reach US3.7 billion by 2025. The Sino-US trade war will enable Vietnam to occupy favorable conditions, seize Chinese textile and apparel export orders to the United States, and China's export orders will fall by 6%, reaching 18.8 billion US dollars, which is a severe challenge for Chinese textile and apparel enterprises.
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