As the world's most developed economy and China's main textile exporter, the United States' main leaders and political propositions often greatly affect Sino-US relations and trade between China and the United States, such as the trade frictions in 2018 and 2019.
Therefore, the 2024 US election will have a great impact on China's textile exports to the United States in the future. But after the shooting on the afternoon of the 13th local time, the election began to tilt.
On the afternoon of the 13th local time, when former US President Trump was giving a speech at a campaign rally in Pennsylvania, gunshots were heard at the scene. The live broadcast showed that Trump had blood on his right ear. US Secret Service personnel confirmed to the media that Trump was safe.
Richard Goldinger, the district attorney of Butler County, Pennsylvania, said that after the shooting, the gunman and at least one spectator died.
US law enforcement officials said that the shooting at the rally of former President Trump was characterized as an "assassination attempt" and has been investigated and handled as an assassination case. According to multiple law enforcement sources, the gunman was on a building outside the rally venue at the time, and law enforcement officers initially believed that he was a sniper. It is reported that the gunman was shot dead by the Secret Service.
After the shooting, former President Trump's tough performance greatly improved his poll numbers in the short term, and the balance of the election results began to tilt.
If Trump returns to the presidency, what impact will it have on the textile market?
The Washington Post reported that former US President Trump, who is running for office, has privately discussed with advisers the possibility of imposing a 60% tariff on all Chinese goods.
The report said that Trump is increasingly confident of winning the Republican nomination. If elected, the focus of his second term will be to strengthen the policies he implemented in his first term, such as cracking down on immigration, corporate tax cuts, and imposing destructive new tariffs on US trading partners.
He will promote legislation to allow the United States to automatically impose "reciprocal" tariffs on all countries.
Trump promised to remove China's status as a "most favored nation" for trade. According to Trump, tariffs on foreign goods add vital revenue to the US budget, and current import taxes are the lowest in the world.
China ranks third in the list of US trading partners, second only to Mexico and Canada. In November 2023, China accounted for 11.7% of the total US foreign trade.
The last round of trade friction involved 370 billion US dollars of goods, and the tariff rates of the goods involved were mostly 25% and 15%. According to PIIE's assessment, after the tariff increase, the overall tariff rate of the United States on China rose from 3% to 19%. From May 2018 to May 2024, the annualized growth rate of my country's exports to non-US regions (TTM) was 7.2%, and the annualized growth rate of exports to the United States (TTM) was 1.7%. Therefore, the first round of trade friction dragged down my country's exports to the United States by 5.5 percentage points and dragged down my country's export growth to the world by about 1 percentage point.
In the key areas of US tariff increase from 2018 to 2019, most of my country's exports showed low growth in exports to the United States but high growth in exports to the world, reflecting that some industries actively expanded other markets or bypassed tariff restrictions through other countries. At the same time, we found that during the trade friction, the export delivery value of low value-added industries with US tariffs + declined significantly, which may reflect that such industries optimized their production capacity layout by relocating overseas.
If the 60% tariff is implemented, a simple static calculation will directly drag down my country's exports by about 2.1-2.6 percentage points (the actual impact will be less than this level), and will have a significant impact on the profit margins of most foreign trade companies, and the willingness of companies to invest overseas may be further improved. From the perspective of US law, Trump's global tariff plan may face stronger legal resistance, but there is a certain possibility of imposing tariffs on China.
We use the historical experience method and the tariff rate impact coefficient method to estimate the impact of Trump's tariff plan. Assuming that high tariffs do occur, my country's export amount to the United States may face a significant decline, directly dragging down my country's exports by about 2.1-2.6 percentage points in a static situation, and dragging down economic growth by about 0.2-0.3 percentage points. However, on the one hand, considering the high inflation pressure and legislative resistance in the United States, the tariff rate will not necessarily rise to 60%. On the other hand, my country's foreign trade companies may significantly increase their exports to the United States through ASEAN, Mexico and other places to offset the impact of rising tariffs. The impact of the final tariff plan is expected to be less than the above estimate.
