From 10% To 25%, How Will China's Textile Enterprises Respond To The US Tariff Increase?

In August 1st, the US trade representative, lettlet, announced that

President Trump has instructed him to take action to raise the tax rate on Chinese products worth 200 billion US dollars to 10% from the original 10%.

For this reason, the United States postponed the deadline for submission of public written comments from August 30th to September 5th, and postponed the application for hearing to August 13th.

According to the International Trade Office of China Textile Corporation, the list of tariffs proposed by the Trump administration in July 10th was preliminarily arranged. The textile products were calculated over 900 tax codes according to the US standard, covering a very wide range, including all kinds of raw materials (cotton, wool, silk, hemp and chemical fiber).

Fabric, and industrial use

And part of it

The annual export volume to us products is about US $4 billion.

The textile tariff of 4 billion US dollars is added to 10% of the tax rate, that is, the additional tariff of 400 million US dollars, and the tax rate added to 25% is the added tariff of 1 billion US dollars.

Since the beginning of the Sino US trade war, news of the popularity of the United States government from Trent has changed over the course of the day.

(click read intervention: the Trump administration has changed a lot, added tariffs and changed it again).

The relevant person in charge of Shanghai Hua Shen import and Export Co., Ltd. said that there were too many uncertain factors, which led to too subjective judgement in the current order.

It is hoped that the government will give a clear direction to the textile and garment industry, avoid the harm caused by trade friction as much as possible, and improve the investment environment at home, encourage the textile and garment industry to upgrade its technology, and strengthen the free trade agreement with ASEAN, the European Union, the countries along the route and the central and South American countries, so that China's textile and clothing products will have more sales targets.

Zhang Tong, general manager of Beijing Fangda technology company, said to the China textile daily reporter: "the levy duty increased from 10% to 25%, which offset the recent export advantage of RMB depreciation.

Although there is no clothing product under the list, the overall trade situation is tight.

A small part of our home textile products are in the list item, but the products are not strong in other developing countries.

Therefore, the purchase price of the end customer will be affected and the purchase volume will be reduced.

Trump's later policy may involve more clothing products, and I hope the government will introduce relevant policies to maintain the competitiveness of our products.

In the long run, enterprises should improve their competitiveness and try to provide medium and high end products with low substitution, while expanding export areas and ensuring trade balance.

There are also some home textile enterprises, which said they were preparing for new products and proofing in autumn and winter.

"Because the future trade situation is uncertain, it is possible to lose much more."

A responsible person from a large export enterprise in Jiangsu said, "textile products are not sophisticated, and have strong substitutability. Combined with low profit margins, the ability to withstand pressure is tested."

Ningbo high import and Export Co., Ltd. responsible person believes that the Sino US trade uncertainty is now increasing rapidly, with many variables, and enterprises can only act cautiously.

"The depreciation of the RMB has some positive effects on the export of Chinese textile and garment enterprises.

In addition, enterprises are constantly improving their R & D capabilities, and new functional fabrics are highly recognized by European and American customers.

We should work hard in innovation and make great efforts in intelligence, so that enterprises can cope with the complex trading environment.

To this end, the China Textile Import and Export Chamber of Commerce said that the public appraisal procedure could have a very positive effect. The US $50 billion tax collection list covering 1333 eight bit tariff codes issued in April excludes 515 tax numbers after the public appraisal process.

Therefore, the chamber of Commerce recommends that the affected Chinese enterprises take immediate action to unite with the US importers and downstream users, and actively take advantage of the public review procedure for the $200 billion list conducted in 7~9 months, so as to exclude the products from the final tax list.

Specific recommendations are as follows:

First, the enterprise accurately determines whether the product is in the newly added tariff list.

Since the list released by the US is used by the US tariff code, it is not consistent with the Chinese tax code. Therefore, the enterprise should first screen the first 6 tax numbers in the United States and carefully examine the product descriptions under the 6 tax numbers to confirm whether the products fall into the list.

(if there is any doubt about the product tax issue, please contact the China Textiles Import and Export Chamber of Commerce.

)

Second, contact the US importer immediately, ask the US importer to submit a comment on objection to taxation and submit it to the public hearing for public comment by August 13th.

Submit written comments before August 17th.

In September 5th, all written comments were submitted to the deadline.

In addition, when applying for a product to exclude or submit comments, the company proposes to negotiate with the buyer as soon as possible about tariff sharing in the future, and incorporate the relevant clauses into the contract or make clear the responsibilities of both parties through supplementary agreements, so as to avoid risks.

In response to the US's intention to raise the tax rate on the US $200 billion export to the US, a spokesman for the Ministry of Commerce issued a statement on the 2 th.

The spokesman said that China is fully prepared for the threat of the US's escalation of the trade war and will have to make counter measures to safeguard the dignity and interests of the people, defend the free trade and multilateral system and safeguard the common interests of all countries in the world.

At the same time, China has always advocated resolving differences through dialogue, but the premise is that we must treat each other equally and keep our promises.

Many enterprises said in the interview that it is unclear whether the United States really intends to raise the levy to 25% or for other purposes.

A spokesman for the Ministry of Commerce said on the 2 day that the US side had two moves in the two days. On the one hand, it issued a statement to raise the tax rate on the 200 billion US dollars exported to the United States from 10% to 25%. On the other hand, it had to disperse the wind and resume negotiations with the Chinese side.

Some clothing export enterprises said they noticed that in late July, Trump Ivanka Trump announced that they would close the fashion brand of the same name.

The brand was founded in 2007, and the product line contains

According to WWD, the valuation of Ivanka Trump brand was about $100 million before Trump took office.

During the Trump campaign, Ianka Trump basically appeared in his own brand clothes in public, which greatly enhanced the brand's attention.

Although in January 2017, the first daughter announced that she had left her personal brand, she was ready to become an informal adviser to the White House in March, but in fact she still held a brand equity.

After taking office, Trump has been committed to "manufacturing in the United States" and has threatened to punish us companies that mainly set up factories overseas by imposing high tariffs.

However, according to the New York Times survey, almost all the products of Trump are produced overseas.

According to the data provided by the trade database ImportGenius, as of December 5th last year, there were 193 batches of Ianka Trump commodities, mostly Chinese made shoes and handbags.

The brand's dresses and shirts are from China, Indonesia and Vietnam.

To this end, many people believe that Ianka Trump closed the same name brand revealed two signals: first, to further confirm the clothing made in China.

Stateside

The proportion is very high. Two, the Trump administration is serious about Sino US trade war and "made in the United States". Chinese enterprises should prepare well.