Sino US Trade Frictions, Textile Companies Go To The United States To Assist Enterprises In Maintaining Stability Interests

In June 25, 2019, entrusted by President Cao Jiachang, the vice chairman of the textile chamber of Commerce, Wang Yu, led a delegation to the United States to participate in the US $300 billion (Listing 4) tax hearing plan for the 301 US survey of China held by the office of the United States Trade Representative (USTR). The hearing was held in Washington on 17-21 and 24-25 June, and for 7 days, 320 representatives from Chinese and American enterprises and trade associations participated. The tax product covers more than 3800 items of tax, including clothing and home textiles (HS61, 62, 63). According to China Customs statistics, in 2018, China exported $42 billion 680 million to the US list of textile and clothing, involving 29 thousand export enterprises.

On the morning of 25, President Wang spoke on behalf of the Chinese textile and garment industry at the hearing. The following is the full text of the testimony:

First of all, I would like to thank USTR for this opportunity to participate in the hearing. I am Wang Yu, vice president of the China Textile Import and Export Chamber of Commerce (Textile chamber of Commerce).

The textile chamber of Commerce has more than 10 thousand member companies, engaging in the import and export business of all industrial chain products from textile raw materials, yarns, fabrics to garments, home textiles and accessories. In August 23, 2018, I attended the hearing of $200 billion tax collection held by USTR. Today, I will again represent the following opinions on behalf of the member enterprises affected by the proposed tax collection measures:

1, the proposed taxable product has a wide range of influence, which directly damages the interests of the US consumers.

According to the statistics of the US Department of Commerce, in 2018, the United States imported textiles and clothing from China for 44 billion 200 million US dollars, accounting for 36% of the total imports of the United States, second of Vietnam accounted for 10%, third of India accounted for 6.6%, fourth of Mexico accounted for 4.7%, such a huge disparity, it is difficult for other countries to replace it in the short term.

Moreover, the tax-free products are related to finished products such as garments and household textiles, which account for 87.4% of the total textile and clothing imports from the United States. These terminal consumer goods will directly affect the interests of American retailers, distributors and consumers.

Because China's industrial chain is relatively complete, workers are proficient, business management and operation are mature, it is difficult for large quantities of garments and home textiles to be transferred out of China, and no substitute manufacturers can be found quickly after taxes. According to the US Department of commerce data, the amount of imports from the United States in China in 2018 is much higher than that in the four countries, such as 6110 knitted sweaters, 6204 women's suits, etc., which is limited to time and a complete form is available for reference. I hope USTR will be removed.

2, over the years, the textile and garment industry between China and the United States has been stable and dependent on each other. Taxation will undermine cooperation between the two countries in the global value chain.

The United States is the eighth largest importing country of China's textile, clothing and raw materials, and the largest source of cotton imports. In 2018, China imported 528 thousand tons of cotton from the United States, the amount of 1 billion 60 million dollars, and the United States cotton accounted for 33.6% of China's cotton imports. The advantages of Sino US textile and garment complement each other and form a long-term stable cooperative relationship. After the Levy of tariffs, it is bound to cause China's overall decline in exports of textiles and clothing to the United States, the decline in demand for cotton, and the decline in imports of cotton from the United States, thereby affecting the cotton production in the United States and damaging the interests of the American cotton growers.

3, the 26 textile and clothing products tax number has been excluded from the Tax Committee, hoping to be excluded again this time.

Compared with the originally announced tax collection list, the list of three which began in September 24, 2018 was removed from the 297 tax numbers, of which the tax rate of textile and clothing products was 26. The removal should be the decision of USTR to take full account of the views of the parties during the public appraisal. It has legal and economic basis. However, in the 300 billion tax collection list, the removed products appeared again. It is hoped that USTR will continue to remove these unique and irreplaceable products when announcing the final tax list.

Over the past year, the expansion of US tax products has worried us. From the initial raw materials, semi finished products to the current clothing and household textiles, the range of products is expanding and the amount is growing. This will have a wide impact on the production and life of enterprises and consumers in China and the United States. We call on the US government to cautiously use the measures to levy taxes on textile and clothing products and resume the normal trade in textile and clothing between China and the United States as soon as possible.

In answering questions, the United States opposed the practice of asking a spokesperson only one question, and raised 5 questions continuously. Including 1, the US asked China to import textile and clothing from the United States, and President Wang said that in 2018, China imported 1 billion 920 million dollars from the United States to textile and clothing and raw materials, an increase of 5.5% over the same period last year, accounting for 5.4% of the total imports and exports from the world, and the eighth largest importing country in the United States. The main products are cotton, chemical fiber yarn, chemical fiber fabrics and non-woven fabrics. 2, the United States about China's import of cotton from the United States, the president of the United States said that the United States is China's largest source of imports, but after the Levy of tariffs, China's imports of cotton from the United States declined, in 2019, 1-4 months, the United States cotton imports $270 million, down 52% compared to the same period last year, the United States ranked fourth, the adverse effects of tariffs have begun to appear. 3, the US asked how many Chinese workers involved in the US export. President Wang replied that the number of Chinese textile and garment industry reached 20 million, and that of the United States accounted for 16% of our textile and clothing exports. The number of industries involved could not be simply calculated by multiplication and division, and the number of export related enterprises reached tens of thousands. 4, the US asked whether the chamber of commerce is likely to be subject to taxation, and whether the chamber of Commerce will reflect it to the Chinese government. President Wang replied, I will establish an information communication mechanism with the member enterprises. I will have introduced the wishes of the enterprises to the relevant departments of the Chinese government. I hope the Chinese government will fully communicate with the US government and jointly resolve trade frictions. 5, the US asked whether China's exports to the United States have been declining. President Wang replied that the textile and clothing exports to the US in the 1-4 months of this year dropped by 6.5% compared to the same period last year, mainly due to the tariff increase, which affected the confidence of Chinese and American enterprises.

Then president Wang met with MS. Julia Hughs, chairman of USFIA, and David M.Spooner lawyer of Barnes& Thornburg LLp law firm, Mr. Nate Herman, executive vice president of the American Apparel and Footwear Association (AAFA). Ms. Julia thanked the chamber of Commerce for visiting the Fashion Association at the hearing. She introduced the Fashion Association's participation in the third day hearings. She expressed opposition to taxation at the meeting. The overwhelming majority of the representatives of the US textile and garment industry opposed taxation. However, the current US government's characteristics are to maintain the pressure on other countries to make policies, and she reminds Chinese enterprises to make long-term preparations. President Wang said he would strengthen cooperation with USFIA and communicate with each other to find solutions to the current situation. We have prepared for a long-term response. David M.Spooner suggested that I should focus on the impact of trade friction on the interests of American consumers and the domestic industry of the United States, so as to arouse the attention of the US government. Nate Herman executive vice president said that the two hearing of AAFA was against tax measures. They will organize training for member enterprises in the near future to introduce product exclusionary procedures. Vice President Wang Yu thanked the AAFA for its strong hearing, and hoped that the two sides would continue to strengthen cooperation and maintain a communication mechanism to explore ways to minimize the impact of trade friction on China and the United States. During the United States, President Wang also met with lawyers from the Morris Manning & Martin LLP law firm, R Will Planert, to discuss the issues of product exclusions and trade remedy cases in textile and garment enterprises in the current round of taxation measures.

The topic of Sino US trade war has been constant. The textile and garment industry has been considering the impact of this event, especially on textile and garment export enterprises. Some experts pointed out that since last year, foreign relief measures and trade barriers against China's textile and clothing trade have been increasing day by day, and the external situation of textile and clothing trade is becoming more and more serious. Under the Sino US trade war, how should we break the tight encirclement?

With the expansion of US tax products, the Chinese and American industries are generally worried that they will have a wide impact on the production and life of enterprises and consumers in both countries. In the past year, I will launch a lot of work to deal with trade frictions. After the announcement of the $200 billion tax collection list, I will immediately organize more than 20 working groups to compare the customs tax numbers between China and the United States, determine the scope and amount of products involved and inform the enterprises extensively. And sent 3 teams to 6 provinces and municipalities to investigate and understand the situation of enterprises. The chamber of Commerce launched a legal response on behalf of the domestic textile and garment industry. Timely announcement of the Sino US announcement, detailed introduction to policy changes and product exclusionary procedures to enterprises, and two successive hearings of the USTR held by the United States, put forward product exclusionary opinions and objected to the US tax collection. Next, I will submit written comments to USTR on China's industry views. In June 30th, the US side will officially start the 200 billion dollar tax exclusion procedure. I plan to launch an enterprise oriented training program to introduce textile and garment enterprises to the Sino US product exclusionary procedures, help enterprises to do well in coping and safeguard the interests of our enterprises.