The United States has set aside 200 billion US dollars plus tax cards. How do textile companies see the situation?

The spokesperson of the Ministry of Commerce said in a statement that the US side has announced that it will impose a 10% tariff on 200 billion US dollars of Chinese exports to the US from September 24, and will also adopt other tariff escalation. Measures. We deeply regret this. In order to safeguard its legitimate rights and interests and the global free trade order, China will have to counter the system. The US insists on increasing tariffs, which brings new uncertainty to the consultations between the two sides. It is hoped that the US will recognize the possible negative consequences of such actions and take convincing means to correct them in a timely manner.

How should China's textile and garment enterprises see a new round of changes in Sino-US trade situation and make correct predictions?

1. The latest list covers more than $400 million and more than 900 textile products.

In the US Trade Representative Office's July 20, 2018 announcement of the $200 billion in goods taxation list imported from China, a total of 6031 tariff items were included. The list of new amendments contains 5,745 complete or partial items of 6031 tax IDs. After a six-week public comment and a six-day public hearing, the US removed 297 tax ID items in whole or in part from the original proposed tax collection list. Products removed include certain consumer electronics such as smart watches, Bluetooth devices; certain chemicals used in manufactured goods, textiles and agriculture; certain health and safety products, such as bicycle helmets, and child safety Furniture, such as child car seats and playpens.

For China's textile industry, the list still includes 917 tariff lines in chapters 50 to 60, covering all types of textile yarns, fabrics, industrial finished products and some home textiles, etc. 4 billion US dollars.

Why did you decide to start with the 10% tax rate and then rise to 25%? Trump government officials said that this was done to give US companies "more opportunities to find alternative supplies and make adjustments accordingly." On September 7th, Trump said that in addition to the current $200 billion tariff list, if China takes "retaliatory action" against American farmers or other industries, the United States may also launch the "third stage", that is, 267 billion US dollars of Chinese products are subject to tariffs.

However, some analysts believe that the tariff rate is set at around 10%, which is much lower than the 25% tax rate announced by the US government earlier this year when considering the round of tariffs. This is because the US Republican Party is trying to win the upcoming The mid-term elections continue to control Congress, and the end of the holiday shopping season, this tariff reduction is aimed at reducing the impact on American consumers. Trump will reserve room to raise tariffs again to put pressure on the Chinese government.

2. While pulling and playing, what does Trump want?

The British "Financial Times" commented on the new round of tax increases in the United States. Trump's move represents a serious escalation of US-China trade confrontation and puts the global economy at risk.

Some financial analysts believe that the United States’ initiative to "seek talks" did not mean showing weakness to China, but Trump’s routine. He invited China to conduct a new round of negotiations after claiming to levy taxes on China’s $200 billion in exports to the United States. This kind of invitation is not because the United States really intends to compromise, but to test whether China is preparing to make concessions to the United States under the intimidation of the United States. Therefore, the negotiating mentality of the United States has not returned to normal, so even if it is to renegotiate, the chances of reaching a compromise are negligible.

When the Chinese Ministry of Commerce received an invitation to negotiate on the US on September 14, the Chinese Foreign Ministry spokesperson said that in response to the reporter's question, he emphasized two points: First, if the US introduces any new tariff tightening measures to China, China will We must take the necessary counter-measures and resolutely safeguard our legitimate rights and interests. Second, the escalation of trade disputes is not in the interest of either party. We have always advocated that dialogue and consultation on the basis of equality, mutual trust and mutual respect are the only way to resolve economic and trade issues.

This sentence can be interpreted as follows: If the United States launches a new round of trade sanctions against China, China will launch the necessary counter-measures and will never give in to the United States. If the United States wants to negotiate, it must meet equality and mutual trust and mutual respect. Otherwise, China is not interested in the invitation to negotiate with the United States.

At the beginning of August, the Ministry of Commerce of the People's Republic of China stated that in order to defend China's legitimate rights and interests in the emergency of the continued violation of international obligations by the United States, the Chinese government relied on the "People's Republic of China Foreign Trade Law" and other laws and regulations and the basic principles of international law. The 5,207 tax items produced in the United States are worth about 60 billion US dollars of goods, and tariffs ranging from 25% to 5% are imposed. The final measure and effective time will be announced separately.

According to analysis, in the future, the game between China and the United States on the trade war will continue to evolve a new plot. Judging from the current situation, the United States is trying to retreat in exchange for more fraudulent interests. China is sticking to the bottom line and retreating into the United States without giving any chance of fraudulent profit. This continuation means that Trump’s trade in China’s trade war is all negative, and the losses will become larger and larger. The result of this trend evolution will eventually lead to the hard-line faction losing the dominant position. Only then will Sino-US trade negotiations begin substantive negotiations before there will be substantial compromises.

3. Recently, textile and garment “selling for export” has increased the import and export

At present, the United States has imposed land subsidies on China’s $50 billion in exports to the United States. From the perspective of the textile and garment industry, there has not been much direct impact. Some analysts believe that the United States will implement a tax increase of 200 billion US dollars of goods, which will cover the vast majority of commodity types. At that time, industries that rely on higher exports to the United States may be more affected.

Recently, the General Administration of Customs released data showing that from January to August this year, the total value of China's import and export of goods trade was 3015.04 billion US dollars, an increase of 16.1% over the same period last year. Among them, the total value of exports was 1,604.35 billion US dollars, an increase of 12.2% over the same period of last year; the total value of imports was 1,410.69 billion US dollars, an increase of 20.9% over the same period of last year. In August, China's textile yarn, fabrics and products exported 10.283 billion US dollars, from January to August, the cumulative export of 78.74 billion US dollars, a cumulative increase of 9.5%; August China's clothing and clothing accessories exports 16.776 billion US dollars, cumulative exports from January to August 102.67 billion US dollars, a cumulative year-on-year decline of 0.3%.

According to the above data, in August this year, China's textile and apparel exports reached US$27.05 billion, and the previous August exports totaled US$181.4 billion, a cumulative increase of 3.7% compared with August of last year. In terms of imports, in August, China imported 1.631 billion US dollars of yarn, fabrics and products, and accumulated imports of 12.167 billion US dollars from January to August, a cumulative increase of 8.4%.

The analysis shows that in terms of exports, mechanical and electrical products and traditional labor-intensive products are still the main exporters. In the first eight months, China’s exports of mechanical and electrical products accounted for 5.63 trillion yuan, an increase of 13.4%, accounting for 57.1% of the total export value. The seven categories of labor-intensive products such as clothing, textiles and footwear exported a total of 2.05 trillion yuan, an increase of 10%, accounting for 20.8% of the total export value.

It is noteworthy that from January to August this year, China's imports and exports to the major markets such as the EU, the United States, ASEAN and Japan have shown an increase, and the growth rate of imports and exports along the “Belt and Road” countries is higher than the overall level. Among them, China's total exports to the United States in the first eight months of 303.44 billion US dollars, a cumulative increase of 13.4%; imports from the United States 110.806 billion US dollars, a cumulative increase of 11.1%; the trade surplus with the United States further expanded. According to industry insiders, under the background of Sino-US trade friction, China's import and export to the United States still maintains a state of growth, indicating that there is a strong complementarity between China and the US trade structure, and the United States has strong demand for Chinese products.

Bai Ming, deputy director of the International Market Research Institute of the International Trade and Economic Cooperation Institute of the Ministry of Commerce, said that before the trade war, the exporters of the two countries rushed to export. Under this circumstance, the import and export growth in July and August all had the policy of “selling exports” before the policy was put forward. The factors of export are very uncertain in the coming months.

Some analysts in the industry believe that the foreign trade performance in August still has certain stress effects. Enterprises have uncertain concerns about Sino-US trade frictions, and there are phenomena of early delivery and signing. With the implementation of a new round of tax increases, the export growth rate is likely to decline further in the fourth quarter of the future, while the import growth rate may continue to maintain steady growth.

4. What should the textile and garment enterprises face in the face of trade changes?

The United States is an important export market for Chinese textile garment enterprises. In the face of the intensified Sino-US trade changes, especially in the face of the increasing protection of the international market and the complicated foreign trade situation, how should companies respond to reduce the direct friction influences?

Warning control

According to statistics, the upcoming 200 billion US dollars of goods taxation involves more raw materials, does not involve clothing, and these raw materials only account for about 10% of China's total exports of textiles and clothing to the United States. Therefore, some experts said that because the taxation is related to the upstream fabrics and accessories, rather than directly to the finished clothing, and most of the upstream leading company fabric products are not directly exported to the United States, mainly through the final form of finished clothing exports, so textile clothing The impact on the industry is limited overall.

In this regard, the relevant person in charge of Jiangsu Sumeda Group said in an interview that according to the US$50 billion plus US$200 billion tax increase list, the company’s affected business accounted for all exports to the US. 2.1% of the business, the impact is small.

Despite this, the head of Sumeda still specifically mentioned the importance of risk awareness. He said that with the continuous fermentation and upgrading of Sino-US trade friction, it has brought tremendous pressure on textile and apparel exports. In fact, since last year, overseas relief measures and trade barriers against China's textile and apparel trade have increased, and the external situation of textile and apparel trade has become more severe. In order to reduce losses in Sino-US trade frictions, the company has specially issued early warning control: First, actively communicate with US customers, and strive to exclude products from the final tax collection list; second, the business with exposure to foreign exchange risks will be the same. Insuring export credit insurance or adopting corresponding guarantee measures; thirdly, exporting US goods for tax increase, cautiously taking orders and striving for favorable tax plus cost sharing; Fourth, prudently signing trade contracts for exported US goods that have not yet been taxed; The fifth is to improve the organizational structure and business process specifications, and prevent the catastrophic risks caused by trade wars in terms of international sanctions and other compliance.

The relevant person in charge of Shanghai Huashen Import & Export Co., Ltd. said that it is unlikely that the United States will fully tax China's exports to the United States. The main reason is that the current clothing from China is still the most important source of supply in the United States, and its quality and technical content. Relatively better, the delivery period is more stable, and it is difficult to completely transfer to Southeast Asian countries in the short term. Assuming that the tax on clothing will be opened in the future, the positioning of low-end mass casual wear and major suppliers may be greatly affected. In contrast, high-end clothing orders with higher added value are limited. He hoped that the government would give clear guidance to the textile and garment industry, avoid industrial damage caused by trade friction as much as possible, and at the same time improve the investment environment in China, encourage the textile and garment industry to upgrade its technology, and strengthen cooperation with ASEAN, EU and Central and South American countries, especially The free trade agreement between the countries along the “Belt and Road” has been signed so that China's textile and apparel products have a broader market.

Force non-cotton

For the current Sino-US trade friction, some experts believe that Chinese garment enterprises have no urgency in strengthening product innovation. They must strive to turn challenges into opportunities and realize long-term development of enterprises through transformation and upgrading. The most important thing is to pursue high-quality development and cultivate value-added products with core competitiveness based on technological innovation and independent intellectual property rights. At present, more and more companies are spreading trade risks through product innovation.

“Industry upgrading is particularly important.” The relevant person in charge of Jihua 3542 Textile Co., Ltd. said that the company is mainly adjusting its product structure. Now the company's non-cotton fiber products account for about 60%. As far as the current policy is concerned, cotton products are more impacted, so reducing cotton products can ensure that raw material costs do not fluctuate too much. “In addition, we have our own unique research and development advantages. The company develops dozens of new products every year to promote to customers. Not long ago, when we went to the New York exhibition, we brought very few cotton products, and we mainly promoted more than 30 new developments. New fiber fabric products, such as bamboo carbon fiber, coffee carbon fiber, silver ion fiber, seaweed fiber, recycled polyester fiber, Tencel fiber, etc., have a good effect and have made many new customers. Our newly developed products are medium and high-end products, the price ratio The same kind of cotton products are higher. The products are mainly for middle and high-end customers, mainly partial functional products, such as antibacterial, moisture absorbing, deodorizing, etc. It seems that this kind of products are very popular in the US market."

A US export company also said that under the comparative advantage of India and Pakistan cotton products, the company has basically abandoned the production of adult cotton T-shirts and other clothing, and specializes in children's wear. For example, infants taking velvet fabrics are the strengths of the company's research and development. "Southeast Asian companies have to buy fabrics from this fabric, and we must import fabrics from us, plus transportation costs. They will compete with us." She said that the company will Abandon some of the meager orders, and carry out a series of upgrades to the factory, such as technical training for workers and occasional equipment upgrades, in order to improve production capacity.

It is reported that in addition to upgrading the structure of cotton-based to medium-to-high-end functional non-cotton fiber products, Jihua 3541 is preparing new factories, eliminating outdated equipment and replacing new equipment to better. The ground responds to fierce market competition.

Beijing Textile Technology's home textile products are selling well in the US mid- to high-end market, and also benefit from the company's innovation efforts, making other developing countries less competitive with their products. Ningbo Height Import & Export Co., Ltd. is also constantly improving its independent research and development capabilities, and new functional fabrics are highly recognized by European and American customers. The person in charge believes that the trade uncertainty between China and the United States is now increasing sharply and there are many variables. Enterprises must work hard on innovation and work hard on intelligence to cope with the complicated trade environment.

Market wide

In the first half of 2018, Chinese clothing accounted for less than 30% of the US market share, while Vietnam's share rose to more than 15%. Statistics show that in the second quarter of 2018, US apparel imports were basically stagnant, up only 0.5% year-on-year, with imports from China dropping sharply, down 5.7% year-on-year. Its procurement direction began to shift to some low-cost countries, with imports from Bangladesh and Cambodia increasing significantly, up 9% and 11.7% respectively. US imports from Vietnam also increased by nearly 5% in the second quarter after an increase of 1.7% in the first quarter.

In general, affected by the trade friction between China and the United States, the United States has the most obvious decline in the purchase of Chinese clothing. After all, textile and garment trade is mainly based on processing trade, and the profit is usually very thin. If the tariff is imposed, the textile enterprise will be unprofitable.

Referring to the above figures, some experts suggest that companies should not rely too much on the US market. "This is an uncertainty