From May 13 to 15, 2026, U.S. President Donald Trump will visit China for the first time in nine years. The visit coincides with a period of high costs and market stagnation for China's textile industry. International oil prices have remained above $80 per barrel due to geopolitical tensions in the Middle East, driving up costs for polyester filament yarn and other chemical fiber raw materials by about 15% year-on-year. Meanwhile, the cumulative tariff burden on Chinese textile exports to the U.S., including Section 301 tariffs and additional temporary duties, remains at historically high levels. The key question for the industry is whether this summit can break the deadlock.
Cost Side: Middle East Situation as Key Variable
The textile supply chain is heavily tied to oil prices. Since early 2026, U.S. military actions against Venezuela and Iran, along with Iran's threat to block the Strait of Hormuz, have caused severe oil price volatility. According to China Customs data, the average price of polyester filament yarn in Q1 2026 rose 12% from a year earlier, while the operating rate in the chemical fiber sector hovered around 65%, well below the breakeven point of 75%. Companies report being caught in a dilemma: raising prices loses orders, while lowering prices erodes margins.
China, as one of the few countries capable of mediating Middle East tensions, plays a crucial role in this visit. Iran's foreign minister concluded a visit to China on May 6, during which both sides discussed regional stability. If the U.S. and China can reach a consensus on controlling the scale of Middle East conflicts and restoring navigation through the Strait of Hormuz, international oil prices could fall below $70 per barrel. This would reduce chemical fiber raw material costs by 8%-10%, directly easing profit pressure on textile firms. However, the transmission of oil price changes to downstream fabric prices typically has a 1-2 month lag, meaning a recovery in the third quarter is possible but not guaranteed.
Tariff Side: Export Opportunities Amid Policy Volatility
U.S. tariff policy faced repeated judicial setbacks in 2026. On May 7, the U.S. Court of International Trade ruled the Trump administration's 10% global import tariff illegal, marking the second defeat for tariff policy after the Supreme Court's rejection in February. However, Section 301 tariffs on Chinese textiles remain in effect, and combined with additional temporary duties, the comprehensive tariff rate on Chinese textile exports to the U.S. stays in the 15%-25% range.
If this visit leads to a new trade agreement, tariff reductions or exemptions for certain categories could materialize. Industry data shows that China's textile and apparel exports to the U.S. totaled approximately $45 billion in 2025. A 5-percentage-point tariff cut would save exporters about $2.25 billion, boosting orders in home textiles, apparel, and other segments. However, domestic U.S. political dynamics could undermine negotiations—with midterm elections approaching, hardliners may still block substantial tariff reductions.
Industry Impact: Accelerated Shift from Dependence to Diversification
Looking back at the history of textile industry migration, U.S. policy has always been a major driver. After the Section 301 investigation, Chinese textile firms accelerated capacity relocation to Southeast Asia, while cross-border e-commerce channels grew rapidly. In Q1 2026, the share of Chinese textile exports to the U.S. dropped to 22% from 35% in 2018, while exports to ASEAN, the Middle East, and Latin America grew by 8%, 12%, and 10% respectively. A diversified market structure has taken initial shape, though the U.S. remains the single largest destination.
If the visit sends positive signals, it will boost industry confidence in the short term. Capital market interest in the textile sector could revive, improving corporate financing conditions. In the long term, even without major tariff cuts, Chinese textile firms have already enhanced their self-sufficiency through technological upgrades and brand building. Leading companies in clusters like Shengze and Keqiao are increasingly investing in functional fabrics and green dyeing technologies to reduce reliance on low-end processing exports.