Chinese Textile Industry and U.S. Cotton Farmers Struggling

(WASHINGTON, DC) As the U.S.-China trade war drags on, the textile industry is feeling the pain on both fronts. According to the Epoch Times, China’s trade surplus it down 1.6 percent from last year as exports to the United States are down 8.4 percent year-over-year. The U.S. is China’s largest market for textile and apparel exports and Chinese companies are under pressure from both sides. As the price of raw materials increases, the cost of production increase as well. On the other, tariffs are slowing exports, which tightens cash flow and increases the carry costs of storing both raw materials and the finished product as well. Normally, textile manufacturers scale back their operations over the summer to account for the slow season. This year, however, some companies stopped production a month early and some smaller businesses closed their production lines months ago. Inventory of most textile enterprises increased by more than 50 percent compared with the same period last year and one executive called this a buyer’s market. With no end in sight, some textile companies have shifted their production to other countries – especially India and Vietnam – to bypass the negative effects of the tariff trade war. President Donald Trump is set to meet with Chinese leader Xi Jinping later this week in front of formal G-20 meetings in Japan. Trade talks between the two stalled last month after Trump said China renigged on commitments to deliver key structural reforms.