It has been more than half a month since the last round of trade negotiations between China and the United States in Geneva came to an end. At that time, the unexpected outcome of the negotiations was like a pebble thrown into a calm lake, causing ripples in the market and triggering positive reactions. However, practitioners in the textile industry cannot hide their concerns.
The easing of tariffs brings hope to the textile industry
On May 23rd, Eastern Time of the United States, US Treasury Secretary Scott Bessant disclosed a major piece of news in an interview with Fox News: officials of the Trump administration will once again embark on a negotiation journey with Chinese representatives, focusing on tariff issues, and he himself will also be present at the negotiation site. Even more strikingly, Bessent also hinted that "several major" trade agreements are expected to be announced in the coming weeks. Bessent emphasized that the relevant agreements are being accelerated and are expected to be gradually unveiled before the 90-day "reciprocal tariff suspension period" announced by Trump in early April expires. He also mentioned that the agreement proposals previously put forward by many Asian countries were highly attractive. If these tariffs are relaxed, it will undoubtedly bring new orders and new hope to textile enterprises.
The US negotiation strategy is aimed at the European Union
The focus of the recent US tariff negotiations seems not to be on China but on the European Union. Bessent said that in trade negotiations with the United States, most trading partners were "very sincere", while the European Union was a clear "exception". According to a report by CCTV News on May 23rd, Trump announced on social media that he proposed imposing a 50% tariff on the European Union starting from June 1st. He accused the EU of setting up strong trade barriers, imposing value-added tax, imposing fines on enterprises, as well as having many problems such as non-monetary trade barriers, currency manipulation and unfair and unreasonable lawsuits against US companies, and said that the negotiations with the EU had "made no progress". However, on May 25th, after a phone call with EU Secretary General Ursula von der Leyen, Trump agreed to extend the deadline for tariff negotiations to July 9th and also described the conversation as "very pleasant". Bessent's previous remarks might also have the intention of putting pressure on the EU. His sincerity in negotiating with China is truly questionable.
Disagreements remain unresolved, and the textile industry's exports are under pressure
Looking back at the China-Us trade negotiations, if ideological factors are set aside, there is huge potential for complementary cooperation between the two sides. As a huge consumer market, the United States exports mainly high-tech equipment technology, agricultural products and energy, all of which are needed by China. Although China's manufacturing industry has undergone transformation and upgrading, the added value of most of it remains relatively low. For instance, in the textile and garment industry, due to the issue of domestic production costs in the United States, there is basically no hope for the industry to return home. On the contrary, it is the high value-added industries in Europe that the United States urgently needs. But now, the first stage of negotiations between the two sides has covered the parts that were easy to reach consensus on, and the remaining ones are all core differences, making the negotiations much more difficult. Without new "concession chips", it will be difficult to make a breakthrough in the short term.
Can exports break through with tariff reduction
For textile enterprises, although exports to the United States have increased recently, the nearly 50% tax revenue remains a huge obstacle in front of customers. If the next stage of negotiations can indeed reduce some tariffs, it will undoubtedly be a piece of good news for the textile industry, like a timely rain after a long drought.
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