When the globe's two largest economies argue, as seen in the latest round of the China-US trade conflict, many business sectors feel the ripple effect.
With tariffs looming on 200 billion US dollars' worth of Chinese goods, our favorite apparel, handbags and backpacks may soon cost us more.
Many in China's fashion industry are concerned.
At the Dalian International Garment and Textile Fair, manufacturers like Liang Zhouye's company – specializing in swimsuit fabric – are looking to avoid extra taxes on their US exports.
Manufacturers like Liang Zhouye's company – specializing in swimsuit fabric – are looking to avoid extra taxes on their US exports. /CGTN Photo
“As for the American market, we are trying to relocate some of the production facilities to other countries and export the finished goods from there to avoid possible tax increases,” said Liang, whose company is based in Guangdong Province.
Liang's idea, however, won't work for all garment and textile companies in China. For instance, products like furs and leather still heavily rely on local materials.
Products like furs and leather in China still heavily rely on local materials. /CGTN Photo
Nie Chunrong, vice president of the Dalian Fur Industry Association, told CGTN: "We have more than 1,100 member companies in our association. Speaking of the trade war, almost all of these member companies are showing a tendency to focus more on domestic sales, in order to balance out possible losses caused by tariffs."
Nie Chunrong, vice president of the Dalian Fur Industry Association, says many member companies are looking to balance out possible losses caused by tariffs with the help of domestic sales. /CGTN Photo
The tit-for-tat trade war and possible expansion of trade barriers could result in some companies relocating their manufacturing bases to Vietnam, Bangladesh and elsewhere. And regardless of tariffs, for Chinese fashion and textile enterprises today, it's an uphill climb to the top of the food chain.
Chinese fashion and textile enterprises today face an uphill climb to the top of the food chain. /CGTN Photo
Dayang, a company founded four decades ago by 13 housewives in Dalian's rural areas, is now proud of its global dominance in the custom clothing industry. Just like many other garment factories in China, it started as an original equipment manufacturer (OEM). However, Dayang's managing director told CGTN those days are gone.
Dayang, a company founded four decades ago by 13 housewives in Dalian's rural areas, is now proud of its global dominance in the custom clothing industry. /CGTN Photo
Hu Dongmei, the managing director of Dayang Group in Dalian, says the company is negotiating with foreign partners to withstand the extra overhead caused by possible tariffs. /CGTN Photo
So what does the trade war mean for garment companies? Well, with a global supply chain widely spread across international markets, any barriers to the movement of goods could be detrimental.