This Saturday (June 29), the heads of state of China and the United States will officially meet at the G20 Osaka Summit, which may provide a brief pause in the recent intensification of Sino-US trade relations.
200 billion in front, 300 billion in the back! Sino-US trade friction intensifies
On May 10, the United States raised tariffs on $200 billion of Chinese exports to the United States from 10% to 25%, involving about 103% of China’s textile and apparel exports to the United States. One hundred million U.S. dollars.
On May 13, the Office of the United States Trade Representative (USTR) issued an announcement that it plans to impose tariffs of up to 25% on US$300 billion of Chinese products exported to the United States.
In response, China has also issued corresponding countermeasures, and Sino-US trade relations have become tense.
Affected by the excessive growth of water-jet loom production capacity, the prosperity of the weaving market this year is not high, and the tension in Sino-US trade relations has made this sluggish even more The situation is getting worse.
Mr. Xu, the person in charge of a textile company in Wujiang area, said that since the first half of this year, the number of his company’s export orders to the United States has decreased by nearly 30% compared with previous years, including many from China and the United States. reasons for the intensification of trade frictions. At present, the profits of orders have not been greatly affected, and the risk of additional tariffs has been borne by trading companies for the time being. However, with the news of US$300 billion in tariffs, he is somewhat worried about the future prospects.
Similarly, U.S. companies have also responded to the $300 billion in tariffs. Feeling uneasy.
On June 17, the Office of the U.S. Trade Representative held a seven-day hearing on the U.S. plan to impose additional tariffs on approximately $300 billion of Chinese goods exported to the United States. Nearly 90% of the participating representatives expressed their opinions. This raised objections.
Helfen Bay, president of the American Apparel and Footwear Association, said in an interview, “The 25% tariff is a blow to us. If we can move more production out of China, We will do this, but we have been unable to do so.”
Schneider, CEO of fashion brand Katniss Cole, also said that the impact of 25% tariffs on the company’s profits and costs is devastating sexual. “In addition to lowering product quality and raising product prices, we will get nothing by moving to other countries.”
The meeting has not yet begun, but the polyester market has already heard the news
On June 18, the heads of state of China and the United States exchanged phone calls. They met again during the Osaka Summit and had in-depth communication on bilateral relations and other issues.
Affected by this, both the stock market, futures market, exchange rate and commodities have been significantly boosted, as has the polyester industry chain.
According to the data monitoring of China Silk City Network, in just 9 days from the phone call between the heads of state of China and the United States (June 18) to two days before the official meeting (June 27), , almost all products in the entire polyester industry chain have increased significantly:
PTA futures rose by 634 points, and PTA spot prices returned to more than 6,000 points; polyester filament prices also rose sharply It has reached more than 600 yuan/ton; even PX and MEG, which have been underperforming this year, have risen to varying degrees.
Driven by the rise in polyester raw materials, the production and sales of polyester factories have also ushered in multiple peaks.
It can be said that the entire polyester market has already Already caught wind of it.
On the eve of the negotiations, China and the United States showed tough attitudes!
Judging from media reports, before the meeting between the heads of state of China and the United States, both sides released a relatively tough attitude.
According to US media reports, US President Trump said in an interview on the 26th that China and the United States may reach an agreement during the G20 summit. If an agreement cannot be reached, he will impose additional sanctions on China. levy additional tariffs.
“Xinwen Lianbo” on June 27 was titled ” International critical commentary: Tariff threats cannot solve the problem”, “People’s Daily” also published an article titled “Improving tariffs is useless, China has the ability to fight to the end! “The articles all expressed condemnation of the unreasonable tariff increases by the United States and China’s attitude of not being afraid of threats and staying with it to the end.
Meet What impact will the result have on the textile industry?
Because both sides have shown a tougher attitude, the outcome of the negotiations has become increasingly difficult to predict, so the impact will also be affected by the trade friction between China and the United States. Look at three aspects: easing, maintaining the status quo, or intensifying.
>>>>
If the negotiation goes well
If the negotiations go very smoothly, tariffs on US$300 billion in the future can be eliminated, and tariffs on US$200 billion can also be relaxed.
If such a situation occurs, it will naturally be the most beneficial to textile companies situation. Once such a situation occurs, the previously suppressed orders from the United States may burst out in a short period of time, and the “peak season” in the second half of this year is also expected to be advanced.
Polyester In terms of raw materials, the already rising raw material prices may be driven even higher by such good news. Futures bulls continue to exert their strength, and the crazy market prices in July and August last year may be repeated.
>>>>
If the status quo is maintained
If the result of the negotiation is to maintain the status quo, US$200 billion in tariffs will still be levied, and US$300 billion in tariffs will still be levied. The hearing on tariffs continues, but it is not on the agenda for the time being.
If such a situation occurs, fabric varieties that are outside the 200 billion list but within the 300 billion U.S. dollars may be able to do so in a short period of time. Concentrate shipments and rush to trade before the US$300 billion tariff is imposed.
In terms of polyester raw materials, the previous increase in polyester prices was due to market speculation on the one hand and market speculation on the other. The price of polyester raw materials is indeed at a very low position, and there is room for growth. If the result of the negotiation is to maintain the status quo, the price of raw materials may remain stable or fall slightly.
>>>>
If friction intensifies
If negotiations do not go smoothly and trade friction intensifies, $200 billion in tariffs will still be levied, and $300 billion in tariffs will be put on the agenda.
If such a situation occurs, on the one hand, concentrated shipments are expected to still occur, but it will definitely be a very big blow to market confidence. Weaving gray fabrics may be able to obtain goods in a short period of time. It will be partially digested, but the number of orders from the United States will be even smaller in the future than it is now.
As for polyester raw materials, because market confidence has been hit, the rise in futures due to recent overdraft benefits is likely to come to an abrupt end. In addition, the terminal weaving industry is already sluggish. Due to the current situation, the momentum of the entire polyester industry chain may take a turn for the worse and return to the tepid state of the first half of the year.
As for the trade war, China does not want to fight, but it is definitely not afraid of fighting!
And the results of all this will finally be settled on June 29!
China Silk City Network will have follow-up reports, so stay tuned! </p
