From May 13 to 15, U.S. President Donald Trump will visit China for the first time in nine years. The timing coincides with a period of intense cost pressure and market stagnation for China's textile industry. International crude oil prices remain elevated due to ongoing Middle East tensions, driving up costs for polyester filament and other chemical fiber raw materials. Meanwhile, although the U.S. global tariff policy has suffered successive judicial setbacks, the 301 tariffs on Chinese textiles remain in effect. Whether this high-level meeting can break the deadlock is being closely watched by the industry.
Cost Squeeze: High Oil Prices and Tariff Barriers
In 2026, Chinese textile enterprises face cost pressure from two fronts. On the upstream side, the U.S. military actions in Venezuela and joint U.S.-Israeli strikes on Iran, followed by Iran's blockade of the Strait of Hormuz, have pushed international oil prices to multi-year highs. Since petroleum is the primary feedstock for chemical fibers, prices of polyester filament and staple fiber have surged. Industry data shows that average prices of polyester filament in East China rose about 18% year-on-year in Q1 2026, while weaving mills report that order price increases cannot fully cover cost hikes. Plant utilization rates have fallen to 65%-70%.
On the export side, although the U.S. Supreme Court struck down the 10% global tariff in February 2026, and the U.S. Court of International Trade again ruled it illegal on May 7, the 301 tariffs on Chinese textiles remain in force. Combined with previous temporary tariffs, the effective tax rate on Chinese textile exports to the U.S. remains historically high. China Customs data shows that from January to April 2026, China's textile and apparel exports to the U.S. fell about 7% year-on-year, with home textiles suffering the largest decline.
Notably, the backlash of U.S. policies on domestic enterprises is becoming apparent. The American Apparel & Footwear Association has repeatedly warned that high tariffs are pushing up consumer prices, while U.S. inflation remained elevated in Q1 2026. This gives the Trump administration a real incentive to adjust tariff strategies during the visit.
Event Focal Points: Potential Breakthroughs in Middle East and Tariffs
The timing of the visit is significant. Just days before Trump's arrival, Iran's foreign minister completed a visit to China. China has long played a mediating role in the Middle East, and U.S. polls show 66% of Americans oppose military action against Iran. Soaring oil prices have become a key constraint for Trump in midterm elections. Industry analysts believe a consensus on managing the Middle East conflict is possible. If the Strait of Hormuz reopens and oil prices fall below $75/barrel, textile raw material costs could drop 8%-12%, restoring profit margins.
On tariffs, while a complete repeal of 301 tariffs is unlikely in the short term, partial exemptions or rate reductions are becoming more plausible. The recent U.S. court ruling against the global tariff policy signals judicial constraints on Trump's tariff powers. Combined with domestic lobbying pressure, a framework agreement on trade during the visit could lead to temporary tariff relief for consumer goods like home textiles and apparel. This would directly lower export costs and unlock pent-up orders to the U.S.
Industry Impact: Marginal Gains Amid Structural Resilience
Even if the visit yields no immediate policy breakthroughs, China's textile industry has demonstrated stronger resilience. Over the past five years, companies have shifted production capacity to Vietnam, Bangladesh, and Cambodia, reducing reliance on U.S. exports from about 30% in 2018 to roughly 18% in 2025. Meanwhile, cross-border e-commerce channels have surged, with textile and apparel sales to the U.S. via e-commerce growing about 35% in 2025, accounting for over 15% of total U.S.-bound exports for the first time.
Market diversification has also accelerated. In Q1 2026, China's textile and apparel exports to ASEAN grew 12% year-on-year, to the Middle East 9%, and to Latin America 7%. This multi-point expansion effectively hedges against single-market volatility.
However, deep challenges remain. The tight linkage between chemical fiber prices and oil prices is unlikely to change soon, and domestic companies still need to boost self-sufficiency in high-end areas like differentiated fibers and functional fabrics. If the visit can de-escalate Middle East tensions and pave the way for lower oil prices, it would be the industry's most direct benefit.