news of US VS China Trade War

- Feb 26, 2019-

US President Donald trump tweeted on Sunday evening that he would delay a March 1 deadline to raise tariffs on China because of "tremendous progress" in the latest round of us-china talks that concluded in Washington on Sunday.After the "twitter chief White House correspondent" broke the news, xinhua news agency and other authoritative media officially released the news that "the seventh round of high-level economic and trade consultation between China and the us has concluded", saying that the two sides have made substantial progress on specific issues such as technology transfer, intellectual property protection, non-tariff barriers, service industry, agriculture and exchange rate.On this basis, the two sides will follow the instructions of the two heads of state for the next step.

Before the tariff deadline in March, the news was like a warm breeze, which kept the market optimistic.

01

Is a final deal getting closer?

On February 22, local time, US President Donald trump met in the oval office of the White House with liu he, special envoy of President xi jinping, member of the political bureau of the central committee of the communist party of China (CPC), vice premier of the state council and Chinese leader of the comprehensive economic dialogue between China and the us.

With the us set to raise tariffs on some Chinese products from 10 per cent to 25 per cent in March, the prospect of a truce has attracted attention.

As for the outcome of the consultation, trump immediately tweeted a lot of information.

"As the negotiations have been very productive, I will now postpone the March 1 deadline for the us to raise tariffs on China.Assuming that both sides have made further progress, we intend to hold a summit meeting between President xi jinping and me at haihu manor and reach an agreement.America and China had a great weekend!"

Mr Trump also said the us had made "tremendous progress" in trade talks with China on important structural issues including intellectual property protection, technology transfer, agriculture, services, exchange rates and many other issues.

According to the xinhua news agency, the two sides have further implemented the important consensus reached at the meeting between the two heads of state in Argentina, carried out negotiations on the text of the agreement and made substantive progress on specific issues such as technology transfer, intellectual property protection, non-tariff barriers, service industry, agriculture and exchange rate.On this basis, the two sides will follow the instructions of the two heads of state for the next step.

The positive statements made by the two sides have led to speculation that a final agreement is closer and closer to the china-us economic and trade consultation.

Speaking to reporters at the White House, Mr Trump said news on China would be released in the next week or two, bloomberg reported.U.S. Treasury secretary Steven mnuchin also said Friday that a summit is tentatively scheduled for late march at trump's seaside lake estate in Florida.

At the same time, some analysts believe that China's statement that the two sides will "carry out negotiations on the text of the agreement" is also worth paying attention to, indicating that the negotiations have entered the final stage and the preparation of the text of the agreement has begun, which is not included in the results of previous consultations.

02

Optimism drove the market higher

The postponement of the March 1 deadline for more than doubling tariffs on $200bn of Chinese imports will help ease investor concerns about rising trade tensions.The market heated up further over the weekend as significant progress was made in sino-us trade talks.

On the one hand, both the onshore and offshore renminbi surged to a seven-month high, buoyed by positive trade news.On the other hand, all three major U.S. stock indexes closed higher, with the dow rising above the 26,000 mark for the first time since November and Posting its ninth straight week of gains, its longest streak since May 1995.

"Deadline" delay, also let textile industry breathe a sigh of relief.Take cotton as an example. Since the start of the trade war, major stock indexes, cotton futures contracts and cotton spot have all witnessed continuous volatility.

China's cotton textile business climate index was 47.5 in January, down 1.17 percent from December last year, according to the China cotton textile industry association's business climate report for January 2019.However, the China cotton textile industry association also said that the recent china-us trade consultation has been going on, and that at present, the talks have gained momentum and increased the market confidence of enterprises.At the beginning of the New Year, good product competitiveness textile enterprises have started.As the festive atmosphere gradually faded, production and sales gradually return to the normal, is expected to February China's cotton textile boom index will pick up.

According to the statistics of OTEXA of the United States, the total export of Chinese textile and clothing to the United States in 2017 was 38.74 billion us dollars, including 27.03 billion us dollars of export apparel and 11.71 billion us dollars of export textile and manufactured goods.

The analysis of soochow securities believes that with the gradual elimination of the expected uncertainty, the focus of textile and garment enterprises can return to high-quality manufacturing after the order rhythm of the brand returns to normal.In 2019, the main factors affecting the short-term performance of quality manufacturing are export environment, RMB exchange rate and raw material price.There is a certain downward pressure on the export environment, but the estimated impact of exchange rate and raw material prices is relatively small, therefore, high-quality manufacturing enterprises are expected to achieve stable performance development.

At the same time, some people in international relations have reminded us that in the face of the unprecedented changes in the world over the past century, even if we resolve the economic and trade frictions this time, we will not rule out the possibility of other new variables in the future.Judging from the situation, the textile industry should also pay close attention to the changes in the situation, continue to improve their own strength, enhance the ability to prevent risks.

A link to the

Textile export enterprises to the United States do not take lightly

From September 24, 2018, the United States will impose a 10 percent tariff on $200 billion of goods from China.There are 5,745 items of taxable products in the list, involving a total of 917 items in the textile industry, involving all kinds of textile yarns, fabrics, manufactured goods for industrial use and some home textiles, etc., involving the annual export value of products exceeding 4 billion us dollars.

As trade frictions between China and the U.S. have escalated, fabric makers that do business with the U.S. market have been pulling back since last August.In nantong, jiangsu province, a major exporter of home textile fabrics to the us market admitted that orders in the latter half of last year fell by 30 per cent year-on-year.

According to the notification of the transaction result of the 124th Canton fair, the number of American purchasers attending the fair decreased by 4.07% year on year, and the transaction amount of China's export to the us was 2.79 billion usd, down by 30.3% year on year.

A small and medium to the United States from Shanghai, said an official with the spinning clothing trade business if you can cancel the tariff still lag, the market reaction will not so fast, however, stop raising tariffs can make enterprise have a respite, the enterprise is stepping up its buyers with americans and Chinese producers to jointly cope with 10% duty allocation problem, to stabilize the existing export orders in the United States.But with a 10 percent tariff and lower profits, companies won't expand or expand their export operations in the U.S. market next.

The head of a garment trader in suzhou, jiangsu province, said that although the tariff remains at 10%, which reduces the pressure on enterprises to export to the us, the positive impact of easing the tariff is lagging behind.The person in charge mentioned that the next step is to repatriate part of the clothing orders transferred to southeast Asian countries. Although the re-export to southeast Asia can avoid the risk of us tariffs, the local fabric supply is relatively less than the Chinese market, which has a great impact on the organization of production.

The surveyed enterprises generally believe that despite the frictions in sino-us trade, the textile and garment trade is highly dependent on each other: China is the largest source of textile and garment imports from the United States, and "made in China" is cost-effective and hard to replace.

Some experts have reminded the enterprises to treat the positive changes of sino-us trade policies with a normal heart. In the following negotiation period, new twists and turns may occur again.Textile and garment export enterprises to the United States should not take it lightly and must make long-term plans.

It is not advisable to wait for tariff preferences to secure an export share.The head of a small innovative textile company in Beijing believes that the company cannot resist the coming of any risks without its own innovative hit products, and must have irreplaceable "hard goods" to occupy the American market.

Some textile enterprises said, not only to achieve irreplaceable products, foreign trade model to achieve the same transformation and upgrading, the conversion of old and new drivers of urgency.Only by sticking to the high-quality development, paying close attention to the independent innovation of products, adjusting and optimizing the product structure, and strengthening the balanced distribution of the global market, can the Chinese textile enterprises gain a firm foothold in the changeable world trade competition environment, and then win the initiative and the right to speak in the international market.

In addition, China's domestic market prospects, textile and service foreign trade enterprises will look into the eyes."Traditional exporters like us have to adjust to The Times and wait for opportunities," says the marketing director of a guangdong apparel export company.But by the export to do import business, straighten out channels, dredge logistics and other links, have a lot of homework to do.