If both the United States and China stick to their guns till the end of May when the new tariffs imposed by the Trump administration on Chinese imports set in, and the counter-tariffs of China come into play, the ongoing hostilities can upset existing equations and force new alignments in the global textiles and apparel industry.
The confrontation had been expected since Donald Trump took over as US President last year. President Trump’s views about Chinese domination of global manufacturing was well known, but his assertive action has come more than a year after he took over the presidency. The US withdrawal from the Trans Pacific Partnership (TPP), nevertheless, had been immediate. But in case of China, Trump bid his time, preparing ground through jingoistic rhetoric. The first sign that the US would take China head on came in February. Thereafter, it was only a matter of time before the war of words would escalate into a trade war.
As of today, it is too early to comment on the possibility of apparel being drawn into the Sino-American conflict. Apparel manufacturing in China has been on a gradual decline for a few years now, with many Western companies shifting base to other Southeast Asian countries like Vietnam. But Chinese companies are known for back-door entries. By the time the flight of capital had started into Vietnam, many Chinese companies had already set up bases in African countries like Ethiopia.
Moreover, the domestic apparel market in China itself remains humongous and attractive enough for brands and retailers, and with a government crackdown on polluting units and an increasing shift away from man-made fibres, the demand for cotton by the Chinese textiles sector is likely to grow. The imposition of tariffs on American cotton will now render the situation fluid. (WE)
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