The document discusses the impact of tariffs imposed by the US on Chinese textile and apparel imports. It notes that the tariffs will likely cause US retailers to raise prices or lower margins. The tariffs have accelerated companies reducing sourcing from China. India, EU countries, and others may benefit from increased exports to the US as a result. The document also lists some upcoming textile industry events and webinars discussing trends in global sourcing in light of the US-China trade war.

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Textile and Apparel Products
Covered by the U.S.-China Tariff
War–Reference List

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List of products covered

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Beneficiaries

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The Trump administration has imposed 15% Section 301 punitive
tariffs on $300 billion Chinese products (tranche 4) effective
September 1, 2019, which includes almost 80% of U.S. apparel
imports from China. As illustrated above, 15% punitive tariffs
mean:
•If the retailer keeps the retail price unchanged, its gross
margin% could drop around 2.9-3 percentage points.
•If the retailer tries to maintain a gross margin% of 40%, it may
have to increase the retail price by around 11.5-12%.

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The trade diversion effect of Section 301 has
accelerated U.S. fashion companies’ pace of reducing
sourcing from China.
About 83 percent of respondents expect to decrease
sourcing from China over the next two years, up
further from 67 percent in 2018.

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China, European Union (EU28), and India remained the
world’s top three exporters of textiles in 2018. Altogether,
these top three accounted for 66.9% of world textile
exports in 2018, a new record high since 2011. Notably,
China and EU (28) also enjoyed a faster-than-world-
average export growth in 2018, up 7.9% and 6.9%
respectively

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Textile exporters in India are optimistic that the
additional tariff of 25 per cent imposed by the US on
China as part of the on-going trade conflict between
the two has opened up opportunities to increase their
share in the American market.

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Due to capacity limits, no single country has emerged to
become the “Next China.” Instead, China’s lost market
shares in apparel exports were fulfilled by a group of
countries, a phenomenon which can be linked with
fashion brands and retailers’ sourcing diversification
strategy.

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The US’ total import of these textile products from India was
approximately $ 1.71 billion in 2018, which is 43 per cent of
its imports from China. Out of the total textile products,
cotton textiles account for the largest number of tariff-lines.

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The segments that have increased opportunities
for Indian exporters include silk, wool, cotton,
other vegetable fibres, man-made filaments, man-
made stable fibres, floor coverings, non-woven
cordage, special woven fabrics, knitted fabrics
and coated and industrial fabrics.

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The additional tariff hike
does not include garments
and made-ups which won’t
have an advantage like the
other segments

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The Apparel Textile Sourcing Germany (ATSG) trade fair will take
place for the first time in Berlin from September 11 to 13, 2019. Two
hundred manufacturers from all over the world will come together at
the Estrel Conference Center Berlin. Visitors will be given the
opportunity to learn about developments and trends in the global
clothing and textile market. The spectrum ranges from sustainable
clothing to trendsetting production techniques. The organizer is JP
Communications Inc

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Fibre2Fashion’s market intelligence team will elaborate in
detail on how the trade war is a matter of global concern
and the countries that will benefit from it.The free
webinar, to be held on Wednesday, September 18, 2019 at
11:00 a.m. Eastern time (US & Canada), will discuss the
significant changes that are expected in the current global
sourcing scenario, with other countries leveraging on the
escalating trade war.

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QUESTIONS?