Citing a history of non-market measures, the United States has threatened China’s trade practices in the textile and garment industry.
In the last 22 months, 28 US manufacturing plants have shuttered, indicating an increasing burden on US companies, according to the Office of the United States Trade Representative (USTR). Twenty-one percent of the USD 79.3 billion worth of clothing bought by the US in 2024 came from China.
The United States has accused China of unfair trade practices due to domestic textile plants
The USTR shared a post on X that said, “On National Textile Day, USTR is calling attention to the unfair trade practices that are harming the U.S. textile and apparel industry. China’s non-market-based laws and practices in the textile and apparel industry give domestic producers an unfair competitive advantage by allowing them to set artificially low prices for their products.
The closure of 28 U.S. plants in the last 22 months has had a detrimental effect on U.S. textile and apparel producers. Of the $79.3 billion in apparel the U.S. will import in 2024, 21% will come from China, according to another USTR article. More than 30% of all daily de minimis shipments to the U.S. came from Chinese e-commerce companies that flooded our market with low-cost apparel while avoiding tariffs and trade enforcement procedures.
Local industries have been severely damaged by the flood of cheap clothing, especially in the southeastern United States.
Total U.S. merchandise trade with China was valued at $582.4 billion in 2024, according to the USTR. In 2024, the United States exported $143.5 billion in goods to China, a decrease of 2.9% ($4.2 billion) from 2023. The United States imported $438.9 billion worth of goods from China in 2024, up $12.1 billion, or 2.8%, from 2023. In 2024, the U.S. goods trade deficit with China was $295.4 billion, up 5.8% ($16.3 billion) from 2023.
The US and China will meet to talk about Trump’s tariffs
To defuse their increasingly destructive and brutal trade battle, US President Donald Trump’s senior trade officials will meet with their Chinese counterparts this week. Their success will determine the direction of the world economy. Treasury Secretary Scott Bessent stated Tuesday that a trade agreement is unlikely to come from the trade negotiations, which are the first face-to-face encounter between Chinese and American officials since the tit-for-tat tariff escalation began two months ago. However, trade between the two nations has drastically decreased as a result of the high level of tariffs. Businesses and consumers in both nations, as well as worldwide, may welcome any thaw in the trade war.
China has imposed a 125% tax on certain US imports in retaliation for the United States imposing at least a 145% tariff on the majority of Chinese imports.
Nearly all of the ships that were on the water when the tariffs were announced have docked, and the first ships carrying products that would be subject to duties are coming into port. Businesses in China and the US will therefore soon have to choose between paying a duty that more than doubles the price of the imported goods or ceasing to sell them. Customers will therefore be facing price increases and shortages in a few weeks. Both economies have already been harmed by the punitive tariffs. Businesses stacked up products in anticipation of Trump’s “Liberation Day” tariffs, which started in the second quarter, causing the US economy to go into reverse in the first quarter, its first recession in three years.
In the meantime, the government is anticipated to implement additional stimulus measures after China’s factory activity shrank at its quickest rate in 16 months in April. Even though the trade dispute between the US and China is by far the most aggressive, Trump has also placed high tariffs on the majority of other nations. These include a 10% universal tariff on almost all goods entering the US, as well as 25% tariffs on steel, aluminum, cars, auto parts, and certain goods from Canada and Mexico.
The world is therefore eagerly awaiting the talks. Global economists from the World Bank, OECD, and International Monetary Fund have all forecast that Trump’s trade war will have catastrophic consequences for the world economy, rekindling inflation and sharply lowering GDP in some nations.
Like other countries, notably China, that respond against it with harsher tariffs, the US economy is predicted to be among the most severely impacted. The United States may go into a recession this year, according to several US analysts and major banks.