Since last Friday, the United States has raised tariffs on $200 billion of Chinese goods exported to the United States from 10% to 25%. Among them, textile and clothing products have more than 1,000 tax numbers, and the foreign trade market has begun to be “turbulent.” On the 13th, the RMB fell sharply, with both onshore and offshore prices falling by more than 300 points, falling below the 6.88 mark, hitting a new low since early January. On the one hand, the United States exerts pressure, which is negative for textile exports. On the other hand, the country uses exchange rate controls to ease the downward pressure on textile and other exports. In this long and short war, textile bosses seem to feel more “indifferent” than before!
Plummet! The offshore RMB exchange rate has exceeded 6.9!
Affected by news related to trade friction, the RMB exchange rate has recently staged a thrilling “roller coaster” market. Affected by Trump’s tariff remarks, the onshore RMB exchange rate against the U.S. dollar plummeted in early trading on May 6, once falling to 6.7986, the lowest since mid-February. On the 13th, the offshore RMB exchange rate against the U.S. dollar fell below 6.90 around 15:00. mark, hitting a new low since December last year, falling more than 600 basis points during the day. In early trading today, after opening at 6.8497, the offshore RMB exchange rate successively broke through the 6.85, 6.86, 6.87, 6.88 and 6.89 marks. Regarding this trend, many people in the industry believe that changes in the external environment have had a greater impact on market sentiment and have also led to short-term pressure on the RMB exchange rate.
In the Sino-US trade war, Trump vividly performed the “face-changing” of Chinese Sichuan Opera culture, which made this dispute difficult to resolve in the short term. History has proven that China-U.S. trade has always been fought and negotiated at the same time, and there are great uncertainties in the trade war. As far as the exchange rate is concerned, there are still some external instability and uncertain factors, such as the slowdown in global economic growth, trade protectionism affecting international trade development and market confidence, and unstable factors in international politics. Of course, industry insiders also said that the current biggest impact on the trend of the RMB is trade protectionism and geopolitical tensions. In particular, the United States has terminated the immunity of countries importing Iranian oil, which has caused the “risk aversion” in the investment market to heat up again, and many people have switched to investment. U.S. dollar assets, thereby causing the yuan to depreciate.
For textile export companies, the short-term depreciation of the RMB may not bring significant incremental orders to textile and apparel companies soon, but the export costs of related companies The pressure will still be significantly relieved, which is still good for the textile and apparel sector.
I am calm this time! The “trade war” is not the “most painful thing” for Boss Bu!
“At present, on the one hand, the additional tariffs imposed on Sino-US trade have increased our costs; on the other hand, the depreciation of the RMB has virtually alleviated this pressure, but it depends on the degree of both parties. Sino-US trade friction This is not the first time. From the panic last year to the calmness now, whether we can bear it depends on our own competitiveness.” said Manager Wang, who has been engaged in foreign trade of home textile fabrics for many years.
The fact is that the trade conflict between China and the United States has been going on for more than a year. From the beginning, everyone was panicked about the market and did not dare to take orders. Now, they can face it “calmly”. Negotiate with customers step by step and reasonably. In addition, since last year, many companies have begun to explore new foreign markets, especially the countries along the “One Belt and One Road”, which have become new “gold nugget” highlands for the export of many textile fabric companies.
According to customs data, in 2018, the country’s total exports of textiles and clothing totaled US$276.731 billion, a year-on-year increase of 3.52%, and exports continued to maintain positive growth throughout the year. Among them, the total export value of textiles reached US$119.098 billion, a year-on-year increase of 8.12%. Exports to countries along the “Belt and Road” have maintained growth for three consecutive years, with a growth rate of 5.3% in 2018, and exports to ASEAN grew by 11.7%, the fastest growth among major markets. In the first 11 months of 2018, my country’s textile and apparel products exported to the United States accounted for 36% of the market share of U.S. imports, a decrease of 0.4 percentage points from the same period in 2017.
“The Sino-US trade friction is no longer a day or two. The worst and most uncertain era has passed. So far, it has not affected our orders. However, let’s not talk about the erosion of profits, which originally belonged to us. The orders are also likely to be transferred, and the export market this year is actually not optimistic.” said the person in charge of another textile company exporting to the United States.
After a year of repetition, the market’s current psychological tolerance for the evolution of trade conflicts has increased significantly. Although this factor will continue to be negative for the market, especially it will force American buyers to The transfer of orders to Southeast Asia and other places will promote the development of the local textile industry in Southeast Asia. But for current textile people, it is no longer�important factors. For this year’s textile market, the greater impact is on internal factors and the imbalance of market supply and demand caused by the increase in peripheral production capacity. Therefore, the current “variables” in the foreign trade market must be viewed rationally, and there is no need to have an excessive psychological burden!
After all, China will not sit still and wait for death! It is reported that the Tariff Commission of the State Council issued an announcement and decided to increase the tariff rate on some imported goods originating in the United States: Starting from 0:00 on June 1, 2019, the US$60 billion list of U.S. goods that have been subject to additional tariffs will be increased. Partially, increase the tariff rate. No matter how we fight back, market participants are currently looking forward to the eleventh round of negotiations to bring about a turnaround, and the textile foreign trade market will usher in a day of “dark flowers and bright lights”!
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