The Wall Street Journal quoted sources as saying that after weeks of weighing and discussions, Biden is expected to soon decide to lift some of the additional tariffs on Chinese goods, with an announcement as soon as this week. It could include suspending tariffs on consumer goods such as clothing and school supplies and launching a broad framework that would allow importers to apply for exemptions from tariffs.
As soon as the news came out, the clothing and home textiles sector moved higher at the opening. On July 5, leading stocks closed their daily limit, and Melya, Mengjie, Shengtai, Aimer, Peacebird, etc. all rose sharply.
At the same time, on July 5, the onshore RMB exchange rate against the U.S. dollar opened up 6 basis points to 6.6959, and then rose slightly, exceeding the 6.69 mark. At the same time, the offshore RMB against the U.S. dollar rose in the short term, standing above 6.69. pass.
Obviously, the elimination of some tariffs imposed by the United States on Chinese goods will also have many benefits for the textile industry, which will directly trigger a surge in the clothing sector and an increase in the exchange rate. This is the most direct and fastest response, and the result that may be slowly reflected later is that the situation of my country’s foreign trade export industry has improved, increasing overseas demand, and increasing the profits of textile foreign trade export enterprises.
As the overall situation of domestic epidemic prevention and control is improving, the effects of policies and measures to stabilize growth have gradually emerged, and foreign trade operations have seen positive changes:
01
Autumn and winter foreign trade orders have been placed
First, the operating conditions of foreign trade companies have improved. First, let’s take a look at the recent textile foreign trade market. Since the outbreak of the global epidemic, the textile foreign trade market has been severely affected, and the market has taken a sharp turn. Until the first half of this year, there was no significant recovery and it has been in a tepid state. But starting from June, there seems to be a glimmer of hope, and foreign trade orders are being placed one after another. Especially in July, the traditional off-season, there is a lack of new orders in the domestic market, and only small orders and scattered orders are the main ones. At this time, the foreign trade market has already started the production of autumn and winter clothing.
It is understood that some recent orders for autumn and winter clothing in European and American countries have been placed. In the weaving market, orders with higher quality are mostly shipped, which are mainly used for the production of foreign trade orders. Printing and dyeing factories, which are market benchmarks, also reported that they were supported by many foreign trade orders, but there was a serious lack of domestic sales orders. In terms of products, polyester taffeta, pongee, and nylon are the main products used to produce down jackets and cold-proof clothing.
A person in charge of a foreign trade company that mainly exports to Europe and the United States said: “There were so many samples and samples in the past few weeks that it was too busy. This week there are obviously fewer, but orders have also begun to come in. At present, the autumn and winter of 2023 Clothing orders are slowly starting, and the 2023 summer clothing is coming to an end.” He also said that the current order sustainability is relatively strong, and there is no window period, so the factory’s machines have no chance to reduce production and will continue to be full. open.
02
Sea freight fell by 40%, reducing cost pressure on enterprises
Second, the main problems faced by foreign trade companies have improved. Problems such as high logistics costs, difficult and expensive financing, and large exchange rate fluctuations have been alleviated, and labor difficulties are generally under control. Recently, international shipping rates have fallen sharply. In 2021, container freight rates on some popular global routes once climbed to US$20,000 per TEU. Entering 2022, with the recovery of the global logistics supply chain, sky-high sea freight rates have gradually begun to loosen up, and freight rates on popular routes have generally fallen by 30 to 40% year-on-year. The FBX index released by the Baltic Shipping Exchange shows that on June 29, the average FBX container shipping price was US$6,583, which has dropped 40.9% from the historical high in September last year.
Through research, it has been found that since the surge in shipping costs, it has always hindered the placement of foreign trade orders. High sea freight has put great cost pressure on foreign clothing manufacturers. Once the price surge caused completed orders to be delayed again and again, and customers were slow to receive the goods. New orders are on the sidelines for a long time, and actual orders are limited. As ocean freight gradually recovers, some new orders have been re-placed. The loosening of sea freight rates has prompted an increase in foreign trade orders, which is an important factor affecting future foreign trade market conditions.
03
Foreign trade is basically facing a good trend and the trend is obvious
Third, foreign trade is basically facing a good trend. According to customs statistics, China’s textile and apparel exports in May 2022 were US$29.23 billion, a year-on-year increase of 20.4% and a month-on-month increase of 23.9%. From January to May, the country’s textile and apparel exports totaled US$125.07 billion, a year-on-year increase of 11.2%. From the comparison of data, the value of my country’s textile exports is higher than that of the same period in 2021. Our country has taken the lead in getting the epidemic under good control, and our country’s textile and clothing exports have certain advantages.
At the same time, we have promoted the promotion and implementation of free trade agreements such as RCEP and promoted the in-depth integration of industrial chains among member countries.Large-scale foreign economic and trade cooperation is of great significance. RCEP has officially come into effect on January 1 this year and is being mastered and used by more and more companies. In the first five months of this year, the national trade promotion system issued 43,600 RCEP certificates of origin, with a total of more than 10,000 companies applying for the certificates, and the cumulative visa amount reached US$2.082 billion. From the perspective of export commodity classification, the main products are clothing and clothing accessories, organic chemicals, plastics and their products, etc. In terms of foreign trade policy, the China Council for the Promotion of International Trade will attach great importance to stabilizing foreign trade and vigorously support enterprises’ foreign cooperation and innovative development to enhance the international competitiveness of Chinese enterprises.
The above three aspects all reflect the good and upward development of my country’s foreign trade market. If the United States cancels some tariffs on China, it will become the icing on the cake. Although domestic sales have been the main force in the textile industry in the second half of the year, judging from the current momentum of foreign trade, it will become a “dark horse”!
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