According to the Ministry of Commerce, on June 15, 2018, the U.S. government announced that it would impose an import tariff of 25% on 50 billion U.S. dollars worth of goods originating in China, of which about 340 billion U.S. The tariff-raising measures for commodities will be implemented on July 6. Additional tariff measures for the remaining US$16 billion will further solicit public opinions. The United States disregards China’s resolute opposition and solemn representations and insists on taking actions that violate the rules of the World Trade Organization. It seriously violates China’s legitimate rights and interests under the rules of the World Trade Organization and threatens China’s economic interests and security.
On June 16, the Ministry of Commerce issued an announcement to impose tariffs on certain products originating in the United States. According to the announcement, in order to safeguard the legitimate rights and interests of China in violation of the international obligations of the United States, China decided to rely on laws and regulations of the Foreign Trade Law of the People's Republic of China and other basic principles of international law to determine soybean products and other agricultural products originating in the United States. The tariff rates for imported goods such as automobiles and aquatic products are levied at a reciprocal rate of 25%, involving about 34 billion U.S. dollars in imports from the United States in 2017. The above measures will take effect from July 6, 2018. At the same time, China intends to impose an import tariff of 25% on commodities imported from the United States, such as chemicals, medical equipment, and energy products. The amount of China's imports from the United States in 2017 will be approximately US$16 billion, and final measures and effective time will be announced separately.
In the list released by both parties, how many products related to the textile and apparel industry are produced?
According to the analysis of the China Textile International Capacity Cooperation Enterprise Alliance, most of the textile machinery products were removed compared with the list of tariffs announced by the U.S. Trade Office on the 3rd of April. Machines that stretch, deform or cut rayon textiles (article number 8444400) are still among the few taxing products. The U.S. government held a hearing before the May 301 investigation in May. Several major U.S. textile and apparel industry organizations have issued a clear-cut stand. All interest groups related to textile and clothing are opposed to the Chinese textile machinery products. tariff.
Wang Shutian, president of the China Textile Machinery Association, recently analyzed at an industry conference that China’s textile machinery exports to the United States are modest. In 2016, the total exports of textile machinery to the United States exceeded US$100 million, and in 2017 it increased to US$160 million. The United States is the world’s largest producer and user of carpets. China’s direct stacking machine has a strong global advantage. Sino-US trade friction will have a certain impact on the product of direct stacking machines. On June 15th, the new taxation list issued by the United States more specifically targeted China's manufacturing of equipment related to 2025. Assuming that trade frictions are not further upgraded, the fundamentals of the machinery industry will be less affected.
In the list of China's 34 billion U.S. dollars imported products added to the tariff list, there are two types of goods related to the production of the textile industry: cotton linter (Tax Code 14042000) and uncombed cotton (Tax Code 52010000). From the perspective of the textile industry, the warming Sino-US trade war will have much impact on the cotton market supply and demand and international trade trends?
From the perspective of the supply and demand of domestic cotton raw materials, it will certainly affect the export of US cotton to China in the short term. Market analysts believe that US cotton, which imposes an import tariff of 25%, will incur greater costs for cotton companies that import quotas for general trade. Currently, the profit of spinning companies is very limited. Unless downstream customers specify products that must use US cotton and are willing to bear the cost increase, they can use other cotton substitutes. Imported cotton from Brazil, Kazakhstan, and Australia can be used as a supplement to the market supply in terms of both product grade and quality performance. According to China's customs statistics, in the year of 2017, China imported 506,000 tons of uncombed cotton from the United States. In March 2018, China imported 3611.676 tons of cotton linters, down 70.2% year-on-year. China's imports of cotton linters mainly come from four countries, Turkey, the United States, Turkmenistan, and India, of which the United States accounted for 22.46%, ranking second, importing 793.535 tons, and the third source of supply in Turkmenistan is very different from the United States. Small, imports of 785.594 tons, accounting for 22.23%.
According to China's imports of cotton linters, the US cotton linters are not irreplaceable. From the perspective of supply and demand in the domestic market, the increase in import tariffs on US cotton will not cause much fluctuation in China's cotton raw material market. Although the inventory of state-reserved cotton is gradually reduced, there are many stockpiles of reserve cotton in the hands of traders and circulation, so the overall supply of the market is not in short supply. Xinjiang cotton has good advantages in terms of quality. If the Xinjiang cotton market can maintain stability, it can meet the demand of cotton companies for high-grade cotton.
Then, how does China impose an import tariff on U.S. cotton? How will it affect the U.S. cotton export pattern?
On June 15, the main contract of US Cotton ICE closed at 89.64 cents/lb, down 3.33 cents/lb, or 3.58%. From the perspective of the evolution of trade friction between China and the United States, each time the two sides announced the increase of the tariff list, ICE suffered a severe setback. In the short term, China imposes negative tariffs on imports of uncombed cotton from the United States. The final trend of US cotton also depends on the development of the trade war.
According to the data released by the US International Cotton Association, the United States is the world’s largest cotton exporter in 2017/2018 and accounts for 39% of the total global cotton exports. As of May 2018, US cotton exports increased by 2.6 million bales over the same period of the previous year. The five major export markets of US cotton are: Vietnam, China, Turkey, Indonesia, and Pakistan. The US cotton consumed by the above five countries accounts for 64% of the total US cotton exports. In terms of import volume, China is second only to Vietnam with 2.751 million bales. From the point of view of import growth, as of May 10 of this year, US imports of US cotton in 2017/2018 increased by 24% year-on-year, a significant increase. The US Department of Agriculture had previously forecasted that according to this trend, the United States will continue to maintain a 20% rapid growth in China’s cotton exports to China in 2017/2018, reaching the highest level of 2.6 million bales in the past five years, and China will become a newcomer to US cotton. The second largest importer. However, the industry generally believes that after the implementation of import tariffs, China’s imports will decrease, depending on the duration and trend of the trade war. Some analysts believe that the introduction of US cotton import tariffs will further aggravate the transfer of the textile industry to Southeast Asian countries, and Vietnam’s consumption of US cotton will continue to grow rapidly.