Textile industry before the big trade war

It is known that in the first phase of the US-China trade “war”, the US has not yet applied tariffs to the textile and garment sector. However, it is expected that in the second round of tax packages of up to US$200 billion, which will be applied by the US trade agency, possibly by the end of August, Chinese textile and garment products will be subject to tariffs of up to 10% of the price. incremental value.

According to Trade Map (Updated database system on trade situation, especially import and export of countries), the total import turnover of textile and garment of the US in 2017 reached 114.12 billion USD. , of which imports from China were US$40.83 billion (equivalent to 35.78%), from Vietnam was US$12.26 billion (10.75%). If the trade “war” has not stopped, the US will impose tariffs on Chinese textile products 932/a total of 3,393 tariff lines China has exported to this country, accounting for about one-third of the tariff lines to the US affected. .

Chinese products with a large market share (over 20%) that are greatly affected in the market include carpets of all kinds, high-elastic polyester monofilament, synthetic short-fiber yarn, canvas fabric, cotton fabric, fabric Nonwovens, knitted fabrics… Therefore, according to Mr. Cao Huu Hieu, Managing Director of Vietnam National Textile and Garment Group (Vinatex), the Group has also analyzed and found that the domestic textile and garment industry has about 20 items. may have the opportunity to take market share in the US when China is subject to import tariffs.

Among these, there are products that Vietnam has strengths such as: canvas fabric, tire curtain fabric, woven fabric from synthetic long fiber, and short PE synthetic fiber. In 2018, the domestic textile and garment industry will not be affected by the trade “war” between the two countries.

In fact, the announcement of the Vietnam Textile and Apparel Association shows that, in the first half of 2018, the textile and garment industry continued to maintain high export turnover growth with a total export turnover of 16.5 billion USD, an increase of 16. 49% over the same period last year, higher than the growth rate of 10.43% in the same period of 2017.

The association also assessed on 3 bases: High export growth rate in the first 6 months as mentioned above; developments from the US-China trade “war” in favor of Vietnamese goods; According to the rapidly increasing import progress of raw materials and accessories, it is expected that Vietnam’s textile and garment exports will achieve good export growth in the last months of the year. It is estimated that in the last 6 months of the year, the turnover will reach 18.5 billion USD, raising the export turnover of the whole year to 35 billion USD, exceeding 1 billion USD compared to the plan.

Notably, the order situation of businesses is also very positive, many businesses have received orders until the end of the year. Some companies have achieved export turnover such as: Tinh Loi Garment Company Limited, Viet Tien Garment Joint Stock Corporation, Regina Miracle Co., Ltd., Worldon Vietnam Co., Ltd.

Thus, it can be seen that, by the end of this year, Vietnam’s textile and garment industry can achieve the set export turnover target, even though the US-China trade “war” is taking place. However, if this “war” continues and the two sides continue to punish each other such as the imposition of a tax package of 200 billion USD, in 2019, the textile and garment industry will be affected.

According to the Vietnam National Textile and Garment Group, when the US imposes high tariffs on Chinese textiles and garments, it will force businesses to find replacement customers as well as promote the trend of shifting production to other countries to compete in order to avoid competition. taxed. For example, Chinese enterprises can shift production and “smuggle” surplus goods to Vietnam, threatening the interests of Vietnamese enterprises.

In particular, one thing that cannot be ignored is that, due to high taxes, Chinese enterprises are forced to cut costs from production to reduce product prices to compensate, making the market competition even more fierce.

Therefore, even though there will be advantages in exporting some products to the US market, the chance is 50-50, so only businesses that know how to take advantage will win.

According to New Hanoi Newspaper.