On August 12, China and the United States jointly announced a temporary trade policy adjustment: 24% of the 34% tariffs mutually imposed in April this year will be suspended for 90 days, while the remaining 10% of the additional tariffs will remain in place. The introduction of this policy quickly injected a “booster shot” into China’s textile export sector, but it also hides challenges from long-term competition.
In terms of short-term impacts, the immediate effect of the policy’s implementation is significant. For China’s textile and apparel export enterprises that rely on the US market, the suspension of the 24% tariff directly reduces export costs. Taking a batch of textile fabrics worth $1 million as an example, an additional $340,000 in tariffs was required before; after the policy adjustment, only $100,000 needs to be paid, representing a cost reduction of over 70%. This change has quickly been transmitted to the market: on the day the policy was announced, enterprises in textile industry clusters such as Shaoxing in Zhejiang and Dongguan in Guangdong received urgent additional orders from US customers. The person in charge of a Zhejiang-based export enterprise specializing in cotton clothing revealed that they received 3 orders for a total of 5,000 autumn and winter coats just in the afternoon of August 12, with customers explicitly stating that “due to the reduction in tariff costs, they hope to lock in the supply in advance.” A fabric enterprise in Guangdong also received replenishment demands from US retailers, involving categories such as denim and knitted fabrics, with order volumes surging by 30% compared to the same period in previous years.
Behind this short-term positive effect lies the market’s urgent need for stability in the trade environment. Over the past six months, affected by the high 34% tariff, China’s textile enterprises’ exports to the US have been under pressure. Some US buyers, to avoid costs, turned to purchasing from countries with lower tariffs such as Vietnam and Bangladesh, leading to a month-on-month decline in the growth rate of China’s textile exports to the US in the second quarter. The suspension of tariffs this time is equivalent to providing enterprises with a 3-month “buffer period,” which not only helps digest existing inventories and stabilize production rhythms but also creates room for enterprises on both sides to renegotiate prices and sign new orders.
However, the temporary nature of the policy has also laid the groundwork for long-term uncertainty. The 90-day suspension period is not a permanent cancellation of tariffs, and whether it will be extended after expiration and the extent of adjustments depend on the progress of subsequent China-US negotiations. This “time window” effect may lead to short-term market behavior: US customers may tend to place orders intensively within 90 days, while Chinese enterprises need to be vigilant about the risk of “order overdraft”—if tariffs are reinstated after the policy expires, subsequent orders may plummet.
What is more noteworthy is that the competitive landscape of China’s textile products in the international market has undergone profound changes. The latest data from January to May this year shows that China’s share of the US clothing import market has dropped to 17.2%, which is the first time since statistics began that it has been surpassed by Vietnam (17.5%). Vietnam, relying on lower labor costs, advantages from free trade agreements with regions such as the EU, and its rapidly expanding textile industry chain in recent years, is diverting orders that originally belonged to China. In addition, countries such as Bangladesh and India are also accelerating their catch-up through tariff preferences and industrial policy support.
Therefore, this short-term adjustment of China-US tariffs is both a “breathing opportunity” and a “reminder for transformation” for China’s textile foreign trade enterprises. While seizing the dividends of short-term orders, enterprises need to accelerate upgrading towards high-end fabrics, branding, and green manufacturing to cope with the long-term pressure of international competition and the uncertainty of trade policies.
Post time: Aug-14-2025