The Tariff Of 300 Billion Dollars Will Be Halved. Can This Give 2020 Of Textile Quotes "Chicken Blood"?

In January 15th, China and the United States formally signed the first stage economic and trade agreement in Washington, D.C.

The two sides agreed that the US side will fulfill the relevant commitments to phasing out tariffs on Chinese products in phases, so as to achieve a change in tariffs from rise to fall, including a moratorium on the tariffs to be added in December 15th last year, and impose a tariff rate of 15% on September 1st, which has come into effect in China, to 7.5%.


US tariffs


Textile and foreign trade under heavy pressure


Since the beginning of 2018, news between China and the United States is common, and every time it comes to occupy the "C position". But textile people faced the news of Sino US trade, and from the beginning, excitement gradually became numb. There's no other reason for that.


However, for textile people, the trade disputes did have a substantial impact. During the visit, when the textile enterprises summed up the reasons for the bad market this year, the most talked about was Sino US trade and overcapacity. From a practical point of view, most textile and foreign trade enterprises' export to the US has been cut down this year compared with the previous years, and the export volume has declined by more than 50%.


And will the trade agreement reached between China and the US this time bring substantial benefits to the textile industry?

Compared with previous negotiations


What is the difference between this economic and trade agreement?


In the 2019, Sino US trade was always spent in "beating and talking". Although there are many bad news, there are also some good news, but the follow-up development is not satisfactory.


This is also true of the pet market. When the good news came out, it rose sharply, but then began to fall again. The negotiations are only oral, and the United States has been making a lot of mistakes.


Compared with previous negotiations, what is the difference between the trade agreements?


First of all, we need to clearly understand that the purpose of the US trade war with China is to regenerate the domestic economy by manufacturing the industry, and the US has indeed achieved this goal.


Unlike previous oral negotiations, on the one hand, the contents of this Agreement have been implemented in writing. Between the two big powers, the agreement in black and white will always be more effective than verbal commitments. On the other hand, China and the United States have already put on the agenda of tariff dumping, which is a visible positive fact for textile enterprises.


Customs duties have been reduced.


Can the textile industry rebound?


But at the same time, we also see that after the signing of this agreement, the market did not boil up as imagined.


As far as polyester industry chain is concerned, the price of PX, PTA, ethylene glycol and polyester filament has not increased significantly. There is no outbreak of polyester production and marketing, which is mainly due to three reasons.


First, the time of signing the agreement is close to the lunar new year. Polyester factories have ceased production, and a large number of weaving enterprises have also been on holiday. This time, even if there is another great advantage, the textile market has stagnated and the market will not change too much. Even if there is a market, it will not be until the end of the Spring Festival holiday.


Second, although tariff reduction has been included in the plan and has not really been implemented, the textile market still has some doubts about this. The past few times that the United States has gone wrong has made the textile people develop a habit of wait-and-see.


Third, the tariff is mainly about the products of 300 billion dollars which were added to 15% tariffs in September 1st last year, instead of the 25% tariff which was imposed on 200 billion dollars in May 6th. For textile enterprises, the part added in May 6th is already unbearable. The export to the US has changed from nothing to nothing, but in September 1st, it has never been to no part. Although it looks terrible, there is little difference in fact.


Therefore, for textile enterprises, although this trade agreement is a good thing, it can only be regarded as a good start, and it is very difficult to produce immediate results.


2020


Sino US trade will still be the main theme.


The time has come near the Spring Festival, a large number of textile enterprises have been on holiday. For textile enterprises, the most desired thing is to have a good start after the beginning of next year, to take more orders and make more profits.


However, although the Sino US negotiations have made substantial progress compared with the previous several times, the tax reduction is not enough, and the textile industry can only bring a limited boost. Perhaps with the deepening of negotiations between the two sides in the future, the textile enterprises will have a greater role in promoting exports to the US, but from the present level, it is still too optimistic to hope for the recovery of next year's market.


Predictably, Sino US trade in 2020 is still the main factor determining the quality of the textile industry. But for textile enterprises, it is probably more practical and immediate to make efforts to improve their technological level and product quality and develop more new market and new customers.