The US trade policy has once again cast a shadow over China's textile industry. On April 7, 2025, the China National Textile and Apparel Council (CNTAC) issued a public statement firmly opposing a new round of punitive tariffs on Chinese textile products. This is not merely a protest—it is an industry-wide warning about escalating trade friction risks.
Data shows that China's textile industry remains heavily dependent on the US market. According to industry statistics, China exported over $45 billion worth of textiles and apparel to the US in 2024, accounting for about 15% of total exports. If the new tariffs take effect, some product categories could see rates jump from the current 7.5%-15% to over 25%, adding at least 10 percentage points in procurement costs. For OEM companies with razor-thin margins, this would effectively eliminate profitability.
Background
CNTAC's statement, issued on April 7, comes amid renewed tensions in Sino-US economic relations. The unusually strong wording—"resolutely oppose"—reflects collective anxiety across the supply chain. Over the past three years, the US has imposed tariffs on Chinese textiles and apparel multiple times, expanding from chemical fibers and fabrics to garments and home textiles. The proposed new round targets a broader range of products, directly hitting China's core competitive categories such as polyester filament fabrics and cotton knitwear.
Notably, this is not the first industry statement, but the timing and tone indicate heightened urgency. The statement emphasizes that US actions "seriously violate WTO rules" and calls on the Chinese government to take "necessary countermeasures." This suggests the industry expects the tariffs to take effect, abandoning hopes for mere negotiation.
Industry Impact
The impact of tariff escalation is multi-layered. First, direct cost pressures on exporters. In two major chemical fiber fabric clusters—Shengze and Keqiao—local companies derive 20%-30% of their revenue from US orders, with some factories exceeding 50%. Once tariffs hit, these firms face either order losses or forced price cuts.
Second, the risk of order migration is accelerating. Over the past two years, textile capacity in Vietnam, Bangladesh, and India has expanded significantly. Some international buyers have already shifted routine orders from China to Southeast Asia. Higher tariffs will reinforce this trend, especially for price-sensitive retailers like Walmart and Target, who have publicly stated plans to reduce Chinese sourcing.
- For buyers: Rising costs squeeze margins; supply chain re-evaluation is urgent.
- For factories: Capacity utilization may drop, threatening SME survival.
- For trading firms: Exchange rate volatility plus tariff risks make forward order booking difficult.
Third, the domestic market remains the only hedging channel. But China's domestic textile and apparel consumption growth has slowed to single digits—clothing retail sales grew only 3.2% in 2024. Relying solely on domestic demand to offset export losses is unrealistic. The industry must seek new growth areas, such as functional fabrics and technical textiles.
Practical Recommendations
Companies should not wait passively for policy changes but proactively adjust strategies.
For Buyers - Diversify sourcing: Shift routine orders to Vietnam, Indonesia, and other tariff-preferential countries, while retaining Chinese suppliers for high-value, time-sensitive items. - Renegotiate contracts: Include floating price clauses that clearly allocate tariff costs, avoiding unilateral absorption of all increases. - Avoid transshipment risks: US Customs has strengthened origin verification; violations can lead to heavy fines.
For Trading Firms - Accelerate overseas factory setup: Establish cutting and packaging centers in Southeast Asia to leverage local certificates of origin. - Deepen domestic sales: Develop Chinese brand clients and use e-commerce platforms like 1688 and Douyin to expand channels. - Apply for tariff exclusions: Monitor USTR's exclusion list and file timely applications for differentiated products.
The industry stands at a critical turning point. CNTAC's statement is not just a protest—it is a wake-up call. The era of globalization dividends is fading, and trade barriers are becoming the norm. China's textile industry must shift from scale expansion to value enhancement to weather the storm.