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Just as a group of high-level U.S. officials represented by U.S. Treasury Secretary Mnuchin issued an invitation to China to propose a new round of bilateral trade negotiations, the Office of the U.S. Trade Representative (USTR) issued an announcement on September 17, announcingAdditional tariffs on $200 billion of goods imported from China. The announcement said that according to Trump's instructions,The additional tariff will take effect from September 24, 2018, and the rate will initially be 10%. Starting from January 1, 2019, the rate of additional tariffs will be raised to 25%.

A spokesman for the Ministry of Commerce said in a statement that the US side, in spite of the opposition of the vast majority of international and domestic opinions, announced that it would impose a 10% tariff on US $200 billion of Chinese exports to the United States from September 24, and then take other tariff escalation measures. For this wewith deep regret. In order to safeguard their legitimate rights and interests and the global free trade order,China will have to counter simultaneously.. the us side is bent on imposing additional tariffs,New uncertainty in the negotiations between the two sides.It is hoped that the United States will recognize the possible negative consequences of such actions and take convincing measures to correct them in a timely manner..

While pulling, while playing, the United States this is what kind of trouble? China's textile and garment enterprises should be how to look at the fresh round of Sino-US trade situation changes, to make a correct prediction?

1. The latest list involves 4 billion US dollars and more than 900 textile commodities.

In the US Trade Representative Office published on July 10, 2018, the US $200 billion import tax list from China includes a total of 6031 items. The newly revised list contains all or part of 5745 of the 6031 tax numbers. After six weeks of public comments and six days of public hearings, the United States removed all or part of the goods with 297 tax numbers from the original proposed tax list. Deleted products include certain consumer electronics products, such as smart watches, Bluetooth devices;Certain specific chemicals used in manufactured goods, textiles and agriculture; Certain health and safety products, such as bicycle helmets, and furniture related to child safety, such as child car seats and play fences.

For my country's textile industry, the list still includes 917 tariff lines in chapters 50 to 60, involving all types of textile yarns, fabrics, industrial manufactured products, and some home textiles, etc., involving annual exports of products exceeding 4 billion US dollars.

Why did they decide to start with a 10 per cent tax rate and then go up to 25 per cent? Trump administration officials said it was to give U.S. companies "more opportunities to find alternative supplies and adjust accordingly". On September 7, Trump said that in addition to the current tariff list of US $200 billion, if China takes "retaliatory actions" against American farmers or other industries, the United States may also initiate a "third phase", that is, another 267 billion. US dollars of Chinese products will be imposed tariffs.

However, some analysts believe that the tariff rate is set at about 10%, which is far lower than the 25% rate announced by the U.S. government when considering the round of tariffs earlier this year. It is due to the U.S. Republican Party's attempt to win the upcoming mid-term elections to continue to control Congress and the arrival of the holiday shopping season at the end of the year. This tariff rate reduction is aimed at reducing the impact on American consumers. Trump will leave room for another tariff increase to put pressure on the Chinese government.

2. What does Trump want to do while pulling and playing?

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

Some financial analysts believe that the United States' initiative to "ask for talks" does not mean showing weakness to China, but Trump's routine. He invited China to a new round of negotiations after claiming to tax China on 200 billion US dollars of goods exported to the United States. This kind of invitation is not that the United States really intends to compromise, but to test whether China is ready to make concessions to the United States under the pressure of the United States. Therefore, the U.S. negotiating mentality has not returned to normal, so even if it is renegotiation, the chances of reaching a compromise are slim.

When the Chinese Ministry of Commerce received an invitation from the United States for negotiations on September 14, Chinese Foreign Ministry spokesperson Geng Shuang emphasized two points in response to reporters' questions:FirstIf the US side introduces any new tariff measures against China, China will have to take necessary countermeasures and resolutely safeguard our own legitimate rights and interests.SecondThe escalation of trade disputes is not in the interests of any party. We always believe that dialogue and consultation on the basis of equality, mutual trust and mutual respect is the only way to solve economic and trade problems.

If the United States launches a new round of trade sanctions against China, China will launch the necessary countermeasures and will never give in to the United States. If the United States wants to negotiate, it must meet equality, mutual trust and mutual respect, otherwise China will not be interested in the negotiation invitation of the United States.

China's Ministry of Commerce said in early August that in order to defend China's legitimate rights and interests caused by the continued violation of international obligations by the United States, the Chinese government, in accordance with the the People's Republic of China Foreign Trade Law and other laws and regulations and the basic principles of international law, will impose tariffs ranging from 25% to 5% on goods originating in the United States under 5207 tax items of about US $60 billion. The final measures 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 new plots. Judging from the current situation, the United States is trying to advance for retreat in exchange for more blackmail benefits, while China is sticking to the bottom line and retreating to advance without giving the United States any blackmail opportunities. Such a continuation means that the gains of Trump's trade war with China are all negative, and the losses will increase. The result of the evolution of this trend will eventually make those hardliners lose the opportunity to dominate the situation. Only then will it be possible for China-US trade talks to begin substantive negotiations and a substantive compromise.

3. Recent textile and clothing "grab exports" to increase imports and exports.

At present, the U.S. tariffs on $50 billion of Chinese goods exported to the U.S. have all been implemented. From the perspective of the textile and garment industry, it has not yet had much direct impact. Some analysts believe that the implementation of the US tax increase on US $200 billion goods will cover most types of goods. At that time, industries that rely more on exports to the United States may be greatly affected.

Recently, the General Administration of Customs released data showing that from January to August this year, the total value of my country's imports and exports of goods trade was 3015.04 billion billion U.S. dollars, an increase of 16.1 percent over the same period last year. Among them, the total value of exports was 1604.35 billion billion U.S. dollars, an increase of 12.2 percent over the same period last year; the total value of imports was 1410.69 billion billion U.S. dollars, an increase of 20.9 percent over the same period last year.In August, my country's exports of textile yarns, fabrics and products were US $10.283 billion, and the cumulative exports from January to August were US $78.74 billion, a cumulative year-on-year increase of 9.5; in August, my country's exports of clothing and clothing accessories were US $16.768 billion, and the cumulative exports from January to August were US $102.67 billion, A cumulative year-on-year decrease of 0.3.

Based on the above data,In August this year, China's exports of textiles and clothing were 27.05 billion US dollars, with a cumulative export of 181.4 billion US dollars in the previous August, an increase of 3.7 percent compared with the previous August. In terms of imports, in August, my country's imports of yarns, fabrics and products were US $1.631 billion, and the cumulative imports from January to August were US $12.167 billion, a cumulative year-on-year increase of 8.4.

Analysis shows that in terms of exports, mechanical and electrical products and traditional labor-intensive products are still the main export force. In the first eight months, in terms of RMB, my country's exports of mechanical and electrical products were 5.63 trillion billion yuan, an increase of 13.4 percent, accounting for 57.1 percent of the total export value. Exports of seven categories of labor-intensive products, including clothing, textiles and footwear, totaled 2.05 trillion billion yuan, an increase of 10 percent, accounting for 20.8 percent of the total export value.

It is worth noting that,From January to August this year, my country's imports and exports to major markets such as the European Union, the United States, ASEAN and Japan all showed growth, and the growth rate of imports and exports to countries along the "Belt and Road" was higher than the overall level.. among them,my country's cumulative exports to the United States in the first eight months were 303.44 billion U.S. dollars, a cumulative year-on-year increase of 13.4 percent; imports from the United States were 110.806 billion U.S. dollars, a cumulative year-on-year increase of 11.1 percent; the trade surplus with the United States further expanded. Industry insiders analyze that in the context of Sino-US trade frictions, China's imports and exports to the United States still maintain a state of growth, indicating that there is a strong complementarity in the Sino-US trade structure, and the United States has a strong demand for Chinese products.

Bai Ming, deputy director of the International Market Research Institute of the Institute of International Trade and Economic Cooperation of the Ministry of Commerce, said that before the trade war, exporters of the two countries rushed to export. In this case, the growth of imports and exports in July and August had the factor of "grabbing exports" before the implementation of the policy, and there was great uncertainty about exports in the next few months.

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

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

The United States is an important export market for Chinese textile and clothing enterprises. In the face of the increasingly fierce trade changes between China and the United States, especially in the face of the rising protectionism and complex foreign trade situation in the international market, how should enterprises deal with it? in order to reduce the direct impact of trade friction?

Early warning control

According to statistics, the upcoming US $200 billion commodity tax involves more raw materials than clothing. Moreover, these raw materials only account for about 10% of China's total annual exports of textiles and clothing to the United States. Therefore, some experts said that because the tax is involved in the upstream fabrics and accessories, rather than directly on 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 the overall impact of the textile and clothing industry is limited.

to this,Jiangsu SUMEDA GroupThe relevant person in charge said in an interview that according to the tax increase list of US $50 billion plus US $200 billion announced by the United States, compared with the export volume in 2017, the company's affected business accounted for 2.1 percent of all exports to the United States, with less impact.

Nevertheless, the head of Sumada still specifically mentioned the importance of risk awareness. He said that with the continuous fermentation and escalation of Sino-US trade frictions, it has brought tremendous pressure on the export of textiles and clothing. In fact, since last year, overseas 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 has become more and more serious. In order to reduce losses in Sino-US trade frictions, the company has specially carried out early warning and control: first, it has actively communicated with US customers and strived to exclude products from the final tax list; Second, all businesses with foreign exchange risk exposure will be insured against export credit insurance or corresponding protection measures will be taken. Third, for the export of US goods to be taxed, carefully accept orders and strive for favorable tax increase cost sharing; fourth, prudently sign trade contracts for exports to the United States that have not yet been proposed to increase taxes; and fifth, improve the organizational structure and business process norms to prevent catastrophic risks arising from trade wars in compliance with international sanctions and other aspects.

shanghai huashen import and export co ltdThe relevant person in charge said that it is unlikely that the United States will fully levy taxes on Chinese clothing exported to the United States. The main reason is that clothing from China is still the most important source of supply in the United States, and the quality and technical content are relatively better, and the delivery period is more stable. It is difficult to completely transfer to Southeast Asian countries in the short term. Assuming that the future start of the clothing tax, positioning the low-end mass leisure clothing and major suppliers may be more affected, in contrast, the higher value-added high-end clothing orders are limited. He hopes that the government will give clear guidance to the textile and garment industry, avoid industrial damage caused by trade frictions as much as possible, improve the investment environment at home, encourage technological upgrading of the textile and garment industry, and strengthen the signing of free trade agreements with ASEAN, the European Union and Central and South American countries, especially countries along the "Belt and Road Initiative" route, so that China's textile and garment products have a broader market.

Force non-cotton

Regarding the current Sino-US trade friction, some experts believe that it is urgent for Chinese apparel companies to strengthen product innovation. They must transform challenges into opportunities through transformation and upgrading to achieve long-term development of enterprises. The most important thing is to pursue high-quality development and cultivate the added value of products with core competitiveness based on technological innovation and independent intellectual property rights. At present, more and more enterprises spread trade risks through product innovation.

"Industrial upgrading is particularly important."Jihua 3542 Textile Co., Ltd.The person in charge said that at present, the company is mainly making adjustments in the product structure, and now the company's non-cotton fiber products have accounted for about 60%. As far as the current policy is concerned, cotton products are more affected, so reducing cotton products can ensure that the cost of raw materials will not fluctuate too much. "In addition, we have our own original research and development advantages. Every year, the company will develop dozens of new products to promote to customers. Not long ago, when we went to the New York exhibition, we brought very few cotton products. We mainly promoted more than 30 newly developed new fiber fabric products, such as bamboo carbon fiber, coffee carbon fiber, silver ion fiber, seaweed fiber, regenerated polyester fiber, Tencel fiber, etc. The effect was good and we made many new customers. Our newly developed products belong to high-end products, the price is higher than similar cotton products. The products are mainly aimed at middle and high-end customers, mainly partial functional products, such as antibacterial, moisture absorption and ventilation, deodorization, etc. At present, this kind of product is very popular in the US market."

An export company to the United States also stated 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 clothing. For example, the velvet fabric used by babies is the strong point of the company's research and development. "Southeast Asian enterprises have to import fabrics from us to make such fabrics, plus transportation costs, etc., so they can't compete with us." She said that at present, the company will give up some orders with meager profits and carry out a series of upgrades to the factory, such as technical training for workers and irregular updating of equipment, in order to improve production capacity and other aspects.

It is reported that in addition to upgrading the product structure from cotton-based to mid-to-high-end functional non-cotton fiber-based products, Jihua 352 is preparing to set up new factories, eliminate outdated production capacity equipment, and replace new equipment to better To cope with fierce market competition.

Beijing Fangda Technology CompanyThe home textile products in the United States in the high-end market sales are better, also thanks to the enterprise in the innovation efforts, resulting in other developing countries for its products are not strong substitutability. Ningbo High Import and 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 uncertainty of Sino-US trade is now increasing sharply and there are many variables. Enterprises must work hard on innovation and intellectual development, so that they can calmly deal with the complex trade environment.

The market is wide.

In the first half of 2018, China's share of the US market fell to less than 30%, while Vietnam's share rose to more than 15%. Statistics show that in the second quarter of 2018, US clothing imports basically stagnated, only 0.5 per cent year-on-year, with imports from China falling sharply, down 5.7 per cent year-on-year. The direction of its purchases began to shift to some low-cost countries, with imports from Bangladesh and Cambodia increasing significantly, by 9 per cent and 11.7 per cent year-on-year, respectively. U.S. imports of clothing from Vietnam also rose nearly 5 percent in the second quarter, after rising 1.7 percent in the first quarter.

In general, affected by the Sino-US trade friction, the United States has the most obvious decline in Chinese clothing purchases. After all, textile and garment foreign trade is mainly processing trade, and profits are usually very thin. If tariffs are imposed again, textile enterprises will not be profitable.

Speaking of the above figures, some experts suggest that companies should not rely too much on the US market. "This is a market with a lot of uncertainty, and if you put all your eggs in the U.S. basket, there is bound to be uncertainty about expectations. To shift the market to Southeast Asia, Africa and other regions. Although this may take longer and the process is slower, you have to do it because of the trade frictions between China and the United States, and everyone has to be prepared for a long period of time, including strengthening relations with Central and Eastern European countries." This expert believes that China's textile enterprises should take the initiative to optimize the supply chain as a whole on a global scale, flexibly adjust and optimize procurement, production, sales, capital and other links, and the business is not limited to a certain country and region. avoid the dilemma of the rise of trade protectionism.

Since the 1980 s,Red Bean GroupOn the implementation of "walking on two legs", domestic and foreign trade complementary. At present, Hongdou has established a number of overseas branches in New York, Singapore, Spain and so on. At present, in the foreign trade of red beans, the European market accounts for 50% ~ 60%, the US market 35%, and the Japanese market 10% ~ 15%. The market distribution is more balanced, so red beans in the face of trade friction has a strong ability to resist risks.

This year, under the complicated international situation, the sales volume of red bean foreign trade European market has increased by more than 10% compared with last year. In addition, the person in charge of Hongdou Group believes that in order to effectively prevent risks, enterprises must seize and serve old customers. Among the foreign trade customers of Hongdou, 80% are old customers, among which there are not a few who have cooperated with Hongdou for ten or twenty years, and the customer loyalty is extremely high. In order to better serve the merchants all over the world, Hongdou has made great efforts in the expansion of overseas offices, communicating directly with customers face to face, and achieved good results.

in recent years,Shanghai Textile GroupThrough capital operation and international mergers and acquisitions, the scale has been expanded and the increment has been enlarged, forming new formats of African raw materials, European and American design, Asian processing, Chinese integration and global sales. It has laid out sweater processing plants and spinning mills in Africa, garment and luggage processing plants in Southeast Asia, Myanmar, Laos, Bangladesh, Vietnam and the Philippines, and has also taken action in Central Asia and Eastern Europe. As a result, the import and export volume of textiles and clothing of Shanghai Textile Group ranked first in the country for six consecutive years, including the first in the country for four years and the second in the country for two years.