Under the cloud of Sino-US trade war, how should textile and garment export enterprises respond?1

The Trump administration has once again pushed for an accelerated escalation of the U.S.-China trade war. On July 10, the United States announced that it would impose 10% tariffs on an additional $200 billion of Chinese goods, and published a nearly 200-page list of more than 6,000 products. The Trump administration announced a list of 10% tariffs it plans to impose on about $200 billion of Chinese products, including seafood, fruits and vegetables, yarn, wool, raincoats, jackets, and more. According to a statement released by the Office of the US Trade Representative, the additional tariffs are likely to take effect after the public consultation ends on Aug. 30. According to preliminary understanding, thousands of textile products have been included in the list. The China National Textile and Apparel Council stated that this is the biggest challenge to the foreign trade of my country's textile industry since the United States and Europe canceled the quotas for textiles and clothing. Statistics from China Chamber of Commerce for Import and Export of Textiles Accessories products, mainly including textile raw materials (cotton, silk, wool, hemp, etc.); yarn and fabrics (cotton, wool, silk, hemp, chemical fiber, glass fiber, etc.); carpets; industrial textiles; leather and fur clothing, Hats and gloves, plastic raincoats, etc. Commodities such as woven garments, knitted garments and home textile products, which China exports to the United States with a large value, are not included in the list. Figure 4: The U.S. additional tariffs this time basically cover all products in China's textile export field, which is a big problem for my country's textile and apparel exports. Under the circumstance of high tariffs, domestic textile and apparel companies export to the U.S. market competitiveness It will be seriously weakened, and Chinese textile and garment enterprises must be able to resist the wind direction. So how should my country's textile and garment enterprises face the cloud of escalating Sino-US trade frictions? 1. Gradually reduce dependence on the U.S. market In general, in 2017, my country's total export of yarn fabrics was 66.64 billion US dollars, an increase of 4.7%, of which yarn exports were 4.738 million tons, with an export value of 11.7 billion US dollars; fabric exports were 44.63 billion meters, and exports amounted to US$54.94 billion. my country's export of yarn fabrics to the EU was 5.29 billion US dollars, a year-on-year increase of 5%. Among them, the export of yarn was 1.19 billion US dollars, a year-on-year increase of 3.9%; the export of fabrics to the EU was 4.1 billion US dollars, a year-on-year increase of 5.4%. Exports of yarn fabrics to Japan amounted to US$790 million, including US$370 million in yarn exports and US$420 million in fabrics. Driven by national policies, exports to 16 countries in Central and Eastern Europe have grown rapidly, with a total export of yarn fabrics of US$1.19 billion, an increase of 23.7%. Among the eight countries in South Asia, Bangladesh, Pakistan and India are important exporters of yarn and fabrics in my country. In 2017, my country's exports of yarn and fabrics to Bangladesh reached US$5.14 billion, a year-on-year increase of 8.3%. Exports of yarn fabrics to Pakistan and India were US$1.901 billion and US$1.893 billion respectively. Among the 5 Central Asian countries, exports to Kazakhstan and Uzbekistan are eye-catching, exporting yarn fabrics of US$390 million and US$290 million respectively. Among the seven CIS countries, Belarus has the fastest growth rate. In 2017, the export value was 36.918 million US dollars, an increase of 374.5%. 2. Adjusting the structure In such a difficult situation for the mid-to-high end, and in the face of Sino-US trade frictions, how can companies seek opportunities amid challenges? At present, the company mainly adjusts its product structure. Now, among all products, 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 will not make much difference in raw material costs. In addition, we have our own unique research and development advantages, and the company develops dozens of new products to promote to customers every year.”In the context of China's current loss of cost dividends, for textile and garment enterprises exporting to the US market, product upgrades are undoubtedly a powerful starting point for mid-to-high-end customers. It has become the consensus of enterprises to take the road of differentiation and win the market by making niche products. At the same time, domestic textile and garment enterprises should also speed up product upgrades, improve effective efficiency and quality, undertake small-batch brand orders with high quality and high profits, and cut off low-profit and large-volume orders. 3. Accelerate production capacity upgrades to improve design and brand influence At present, most domestic textile and garment enterprises exporting to the US market are welcomed by the US market due to their low price and superior quality, but the long-term low-profit and large-scale shipments have not improved the domestic textile and garment enterprises in the United States. On the contrary, with the disappearance of China's demographic dividend, the high labor and price costs have weakened the export competitiveness of textile enterprises. Weak competitiveness. The Sino-US trade war will bring a large-scale shuffling movement to textile and garment enterprises, and textile enterprises that fail to compete will inevitably be out of the game. Therefore, domestic textile and garment enterprises must improve production capacity and efficiency, and gradually build brands in the US market at the same time. And consumer influence, starting from the product grade and design ability and brand influence, to build the competitive advantage of the enterprise. 4. Industrial transfer The Sino-US trade war is mainly aimed at the Chinese market, and some new textile industries have not been affected. For example, some countries in Southeast Asia still receive preferential tax treatment policies for textile exports to the United States.

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