$4 Billion On Textiles And Clothing Subject To Tariff Increases

In May 5th, the 125th China Import and Export Fair (hereinafter referred to as the "Canton Fair") ended in Guangzhou. When the textile and apparel industry was taking stock and studying the future of foreign trade and fine rain, Sino US trade and economy began to storm again.

On the ~10 May 9th, the eleventh round of Sino US economic and trade consultation is taking place in the United States. In May 10th, the United States raised the tariff of $200 billion on China's exports to the United States from 10% to 25%.

At twelve three on May 10th at Beijing time, the spokesman of the Ministry of Commerce issued a statement on the United States' official implementation of the tariff increase. The US side has raised the tariff of $200 billion on China's exports to the United States from 10% to 25%. China is deeply sorry about this and will have to take the necessary counter measures. The eleventh round of Sino US economic and trade consultations is in progress. We hope that the US side will work with China and work together to solve the existing problems through cooperation and consultation.

Key variables in consultation

On May 9th ~10, China and the United States reached the eleventh round of negotiations on economic and trade issues. Sino US consultations have entered the most critical stage. However, on the eve of this round of talks, Trump suddenly claimed that on Friday morning of Beijing time, the tariff of US $200 billion export commodities from China to the United States would be raised from 10% to 25% on Friday, and that the remaining 325 billion dollars of China's exports to the United States would also be subject to 25% tariffs.

In May 9th, the US Trade Representative Office (USTR) published a written document in the federal communique that the United States will impose a 25% tariff on 301 Chinese products worth 200 billion US dollars in May 10th.

US tax increases on US $200 billion export to China

In July 11, 2018, the office of the trade representative of the United States issued a list of 10% tariffs on imports of 200 billion US dollars from China. In August 2nd, the United States raised the proposed tariff rate from 10% to 25% for the products listed in the list.

In September 18, 2018, the US government announced the implementation of tariffs on US $200 billion in Chinese goods. Since September 24, 2018, the tariff rate has been raised to 10%, and the tariff rate will increase to 25% in January 1, 2019.

Since September 24, 2018, the United States has imposed a 10% tariff on US $200 billion merchandise from China.

After the G20 summit in December 2018, the US government imposed a tariff rate of $10% on Chinese goods, which remained at 10%.

On the morning of May 6th, Trump announced that it would raise the tariffs of $200 billion on China's exports to the United States from 10% to 25% in May 10th, and said that the remaining 325 billion dollars of China's exports to the United States would also be subject to 25% tariffs.

In May 9th, the US Trade Representative Office (USTR) published a written document in the federal communique that the United States will impose a 25% tariff on 301 Chinese products worth 200 billion US dollars in May 10th.

On May 9th ~10, the eleventh round of Sino US economic and trade consultations took place in the United States. In May 10th, the US side announced that the tariff of $200 billion on China's exports to the US would be raised from 10% to 25%.

In response, a spokesman for the Ministry of Commerce said one after another that the United States threatened to impose tariffs on some Chinese products. Similar situations have occurred many times before, and China's position and attitude have been very clear. We hope that the United States and China will make joint efforts and work together to achieve a mutually beneficial and win-win agreement on the basis of mutual respect. It is the expectation of the whole world for China and the us to properly solve economic and trade issues. Under the threat of US tariffs, the Chinese side embarks on the overall round of the eleventh round of Sino US economic and trade consultations to the United States from the overall situation, showing the sincerity and goodwill of the Chinese side in promoting negotiations. It is hoped that the United States and China will work together to push for new progress in the consultations.

A spokesman for the Ministry of commerce also said that the position and attitude of the Chinese side is consistent and clear. We oppose unilateral tariffs and trade wars without winners. This is not in the interests of China, neither in the interests of the United States nor in the global interest. He said that if the US tariff measures were put into effect, China would have to take the necessary counter measures. China is well prepared, determined and capable of safeguarding its legitimate rights and interests.

The tax products in the US tax increase list involve 5745 major commodities, including electromechanical, light industry, textile and clothing, resources and chemical industry, agricultural products, medicine and so on. There are 5745 items involved in the textile industry, involving 917 textile industries, involving all kinds of textile yarns, fabrics, industrial finished products, and some household textiles. The annual export volume of these products exceeds US $4 billion.

A professional pointed out that in the affected enterprises, foreign-funded enterprises may account for nearly 50%.

Public opinion holds that trade wars will only lose.

According to the global times, after the threat from Trump, the US financial market immediately fell into chaos: the US stock market pointed out that futures had plunged more than 500 points, Nasdaq stock index futures fell more than 1.7%, and standard & Poor's 500 index futures fell 2%. At the same time, the VIX index, known as panic index by the market, rose by 10%. Agricultural products (5.670, 0.11, 1.98%) futures in the Chicago stock exchange were generally down, and US corn futures prices fell by nearly 3%, while US soybean prices fell 2.18%, while prices of other agricultural products generally fell about 2%. On the 6 day of the local stock market, the US stock market dropped sharply, and the Dow opened up 1.7%. Asian stock markets also fell sharply on the 6 day and the Shanghai Composite Index fell 171 points. Offshore RMB against the US dollar fell short and fell below the 6.80 threshold. European stock markets also showed a downward trend on the 6 day, while the French and German stock indexes dropped 104 points and 243 points on the 6 day in early trading. The Morgan Stanley Global Stock Index, which tracks stocks in 47 major countries and regions, fell 0.5% on 6.

Trump's sudden threat this time surprised the world. CNN (CNN) said that just a few days ago, Trump and his cabinet members were cautiously optimistic about the possibility of reaching a trade agreement with China soon.

Japan's news agency said that the world financial market continued to be volatile last year. Since the end of last year, the Sino US trade negotiations have made progress and it is difficult to stabilize. The United States should have long known that trade wars would only hurt both sides, and no one would win. Trump's repeated attitude was worrying.

The US business community also expressed opposition to Trump's remarks. Levi, a senior researcher at the Chicago Global Affairs Commission and former White House economist, said that this is Trump's ultimate pressure tactics. He criticized Trump for taking the trade talks as a joke. "The president's position on this matter is like that we fight for the price of a used car."

Barron weekly quoted Rothman, an investment analyst, as saying that Trump's high handed tactics could not be effective. Adding tariffs would no doubt lead to a reduction in US company profits, hurting American consumers, workers and farmers, and fighting against the stock market, and "his tactics have been well known." A number of American business associations have issued a statement against it. Shapiro, President of the consumer Technology Association (CTA), said in a statement that Trump should know that the part of the tariff is not what he calls China, but that of consumers and businesses in the United States. And the actions of the US government will disrupt the market and cause serious damage to the US industry. Herr Finn Bain, chairman of the US clothing and Footwear Association (AAFA), also said tariff costs would only be spanferred to commodity prices and borne by American consumers. He hoped Trump could cancel the levy and focus on negotiations with the Chinese side.

"Trump said it was China that assumed tariffs (the rising cost of goods), which is a lie." A University of Chicago study found that the US government paid $82 million for customs duties on foreign washing machines last year, but American consumers paid an extra $1 billion 500 million last year. In addition, Trump said tariff increases improved the US economy, but in fact, despite the US government's new subsidy of $12 billion to ease the impact of the trade war, American farmers and many companies still suffered record bankruptcies.

Japan's "Sankei Shimbun" 6, said the United States and China's heads of state had agreed on the two sides' ceasing tariffs when negotiating. But now the United States unilaterally violated the original agreement, which has shocked the world. Countries are now more concerned about the prospects of their trade negotiations with the United States. The Asahi Shimbun also said that Trump's approach made countries feel alert to the US government. People are worried about whether the United States will take a sudden tariff increase in negotiations with Japan and Europe.

Li Haidong, a professor at China Foreign Affairs University in China, said Trump's economic recovery is not entirely true. From many data and phenomena, the US economy can not continue to grow in the long war with China and other countries. The long-term damage to us will be greater than its short-term gains. The United States tariffs on Chinese goods is a double lose act, which is not good for the United States and the world.

Textile people still need to stabilize their own business.

Over the past year, the "uncertainty" brought about by the escalating trade frictions between China and the United States has had some impact on textile and garment export enterprises. Canton Fair is known as "barometer" of foreign trade. According to the results of the 124th Canton Fair held in ~11 October 2018, at that time, the number of purchasers in the United States decreased by 4.07% compared with the same period last year. The volume of China's exports to the United States was 2 billion 790 million dollars, down 30.3% from the same period last year.

The closing of the 125th Canton Fair in May 5th this year, the export spanaction entered a stable period. There were 25 thousand and 500 exhibitors in the Canton Fair, and more than 190 thousand purchasers came to negotiate in 213 countries. Finally, the total export volume was 199 billion 524 million yuan, or 29 billion 730 million US dollars, which was 1.1% lower than that of the spring fair in 2018. Among them, textile and garment clinch a deal of 1 billion 620 million US dollars, accounting for 5.4% of the total turnover, an increase of 200 million US dollars compared with the same period last year. When the spanaction is stable, the quality characteristics begin to appear. Data show that 20% of the brand exhibition area turnover reached 28.8% of the total turnover, new purchasers accounted for 42.15% of the total number of buyers. As a barometer of foreign trade, the new features of the Canton fair show that China's exports are moving from "win the price" to "win by quality".

Strong support for global layout

The total turnover of textile and apparel products increased over the same period last year, largely due to the advantages of many enterprises in reducing costs, enhancing R & D design and owning their own brands. The red bean group has developed a series of recycled fiber fabrics through research and development, adding cold sensing, wrinkle proofing and waterproof functions. It has been recognized by ZARA and other international fast fashion brands, and has also gained many new customers. The head of the Foreign Economic Planning Department of the group's subsidiary company said that the group now has a mature factory in Kampuchea with an annual output of 700 thousand children's suits exported to the United Kingdom.

Shandong's infant clothing enterprise Zhaoyuan ruwa registered "FLYBYFLY" trademark, through 10 years of cultivation, now in Norway, the United Kingdom and other countries opened stores, to achieve one hundred percent independent brand export.

A total of 290 exhibitors were invited to participate in Dongfang International Group. At this exhibition, the enterprises were meticulously prepared and brought their own fist products. The new textile shows the simulation fur products; the textile decoration and the fashionable display style highlight the promotion of sweater goods; the Shenda stock arranger arranges the designer to the scene, strengthens the communication with the customer; the leading stock promotes the portable low-pressure eye mask, the massage waist belt and so on; the overseas exhibition has demonstrated its two luggage brand "Newest" and "Nexttrip". According to the head of the group, the overseas production base attracted customers' attention at this Canton Fair. The global layout of supply chain of the group played a strong support in the process of foreign trade spanformation.

Designer and sales inspiration

The fashion week hosted by the Canton fair product design and Trade Promotion Center runs through the whole exhibition. Guangzhou textile industry and Trade Group Co., Ltd. (hereinafter referred to as "textile industry and trade") has held two fashion shows in the PDC stage and the T.I.T creative park. The fashion show, with the theme of "decoding the color boundary", shows three series of jeans, sweaters and creative design. Among them, the two series of jeans and sweaters are original designs. Cowboy clothing is made of different material printed fabric and cowboy fabric, combined with retro water washing, to create Street cowboy fashion, so that the cowboy is more youthful. The design of sweater uses different styles of pattern mismatch and splicing, cross-border elements mix and match, reflecting the integration of fashion trends and different cultural emotions.

In addition, the creative design works Utopian girl, poetic smoke and rebirth by the Institute of textile and clothing, Guangzhou University and ESMOD School of design are presented. Stiff fabrics and gauze represent the tenacity and delicacy of girls respectively. The raw materials and smoky environment of the construction industry are built with unwashed jeans and spanparent Eugen gauze.

Textile industry and trade have held fashion shows in Canton Fair for several consecutive years, demonstrating the ability of independent research and development of brands and training the designers of "made in China". According to the head of textile industry and trade, "there are more than 150 exhibitors in each trade fair, and there are static exhibition stands and inspection service booths. He said that in recent years, the situation of international trade is changing, and the development of textile enterprises is facing challenges. Textile industry and trade vigorously promote independent innovation, and strive to create a high-end industrial chain of textile service industry centered on design and development.

Short and medium term orders are the largest volume.

The 195454 purchasers of the 125th Canton Fair, from 213 countries and regions, dropped by 3.88% over the same period of the spring fair in 2018. In 2018, the number of China's 10 largest trading partner countries and regions accounted for 64% of the total number of participants, an increase of 2.56 percentage points over the same period last year. The buyers and sellers of the countries and regions along the "one belt and one road" account for 45.03%. In 2019, 101 of the 250 top retailers in the world came to the meeting, and 5 of the top 10 companies were WAL-MART, Hao Shi, Schwartz, Amazon and Al di.

Among the old buyers who attended more than 10 times, textile and clothing accounted for 26.35%. According to Xu Bing, Deputy Secretary General of the Canton Fair, press spokesman and deputy director of China Foreign Trade Center, the trade fair of the Canton Fair brand exhibition area is good. The total turnover was 8 billion 560 million US dollars, accounting for 28.8% of the total turnover. The export of the 64 countries along the "one belt and one road" business was 10 billion 630 million US dollars, an increase of 9.9%, accounting for 35.8% of the total turnover. In the spanaction order, the proportion of short and medium bills keeps high, and the proportion of long bills is still low. Short list accounted for 42.3% in 3 months, 33.4% in 3~6 months, and 24.3% in 6 months.

Xu Bing said that the Canton Fair has expanded the service function and service connotation, giving full play to the role of multifunctional integrated platform, supporting enterprises to develop diversified international markets. First, we should effectively help enterprises develop new customers and develop new markets. More than 80% of the customers in some enterprises are acquainted by the Canton Fair, and 70% of the orders come from the Canton Fair. The participating enterprises accelerate the upgrading of quality and innovation, and continue to exert their strength in technology research and development, product innovation, brand cultivation and so on. The two is to create more opportunities for overseas enterprises. At this fair, 650 companies from 38 countries and regions are exhibiting. Many industry benchmarking and international leading enterprises concentrate on high-end intelligent, green low carbon and products suitable for Chinese market demand. Three, we should effectively drive local opening to the outside world. Arrange 8 regional industrial clusters in 6 provinces and cities to exhibit men's and women's wear, sportswear and casual wear, carpets and tapestries, clothing accessories and accessories, showing a pattern of "one street" of industrial clusters.

Source: Ministry of Commerce, China Council for promoting trade and Global Times