What Do The Latest U.S. Trade Committee Hearings Mean for the Textile Industry?

Trade tensions between the E.U. and the U.S. have continued to escalate after a preliminary list of $11 billion in tariffs was announced in April 2019. In response to European subsidies to Airbus and a subsequent World Trade Organization (WTO) ruling, U.S. textile importers have faced a duty of up to 100% on certain materials.

On August 2, the Office of the U.S. Trade Representative (USTR) held a public meeting in Washington, D.C. to gather input from U.S. citizens concerned about tariffs and damage to the U.S. economy. Representatives from major industries shared concerns about harm to their companies and industries as a whole.

So far, public input has primarily focused on certain industries other than textiles, including steel, copper, electrical components, milk, cheese, gourmet foods, liquor, beverages, and canned goods. While the meeting was open to the public, it was off-camera and a limited amount of information has been released to the media.

The USTR’s message to the public at this point is essentially stay tuned for more information. So what does this mean for U.S. textile importers and processors? Here are some things to keep in mind.

PRICING

If the preliminary tariffs are implemented permanently, they will impact the global pricing of textile materials - not just those in the U.S. and E.U. This is similar to the 10% polyester tariff from September of 2018. Costs will vary significantly depending on the supply, demand, and regional capacity for the material or commodity.

TIMING

The type and amount of tariff countermeasures the U.S. can impose on the E.U. is a matter of controversy and will continue to be debated at the WTO in the coming months. The results of the WTO arbitration are expected to be available by the end of the year.

LIST

We do not have a final list yet. This means for the time being, we must rely on the Preliminary Product List issued by the USTR. For your reference, it is below.

Preliminary Product List specific to textile commodities that may be subject to tariffs of up to 100%:

HTS STAT. REPORTING #

DESCRIPTION

5205.31.00

Multiple or cabled cotton yarn, 85% or more cotton by weight, of uncombed fibers, n/o 14 nm per single yarn, not put up for retail sale.

5206.32.00

Multiple or cabled cotton yarn, <85% cotton by weight, of uncombed fibers, over 14 but n/o 43 nm/single yarn, not put up for retail sale.

5208.13.00

Unbleached 3- or 4-thread twill fabrics of cotton, incl. cross twill, containing 85% or more of cotton by weight, weighing not over 200 g/m2.

5402.11.30

Single high tenacity yarn of aramids, not put up for retail sale

5402.11.60

Multiple (folded) or cabled high tenacity yarn (except sewing thread) of aramids, not put up for retail sale.

5402.20.30

Single high tenacity yarn of polyesters, not put up for retail sale.

5503.20.00

Synthetic staple fibers, not carded, combed or otherwise processed for spinning, of polyesters.

5605.00.90

Metalized textile yarn nesoi, of man-made monofilament or strip or the like, other than ungimped or w/twist of <5 turns per meter.

5609.00.10

Articles of yarn, strip, twine, cordage, rope or cables nesoi, of cotton.

5609.00.20

Articles of yarn, strip, twine, cordage, rope or cables nesoi, of vegetable fibers except cotton.

5609.00.30

Articles of yarn, strip, twine, cordage, rope or cables nesoi, of man-made fibers.

5609.00.40

Articles of yarn, strip, twine, cordage, rope or cables nesoi, of man-made fibers.

 

Please note that in this list, a variety of finished textile materials are included as well: carpets, sweatshirts, pullovers, coats, suits, pajamas, swimwear, blankets, and bed linens.

Service Thread is keeping a close eye on this issue because of the effects it could have on your business. If you would like to find out more information on the textile commodities and products these duties could affect, connect with Service Thread below.

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