The Office of the United States Trade Representative announced on May 31 that it would extend the 301 tariff exemption period for 178 Chinese goods by three months until August 31, 2025. This decision offers a brief respite for the textile industry, but the short-term benefits cannot hide the long-term hidden concerns.
The announcement shows that this extension of the exemption is based on a continuous assessment of the public opinions received in the announcement on December 29, 2023, and the opinions submitted during the four-year review process. The United States Trade Representative has decided to extend the 164 exclusions extended in May 2024 and the 14 new exclusions added in September 2024 for another three months. This decision took into account the previous public feedback, the recommendations of the relevant advisory committee and the opinions of the Section 301 Inter-agency Committee comprehensively.
China is strongly dissatisfied with this and firmly opposes it.
A spokesperson for the Ministry of Commerce said that the US application is filled with a large number of false accusations. It misinterprets normal trade and investment activities as harming the security of the US country and the interests of enterprises, and attributes its own industrial problems to China. This not only lacks factual basis but also goes against economic common sense. Several research reports in the United States show that the US shipbuilding industry lost its competitive edge many years ago due to excessive protection. The US side provides discriminatory subsidies amounting to hundreds of billions of dollars for its domestic industries, but accuses China of adopting so-called "non-market practices". In fact, the development of China's industries is the result of enterprises' technological innovation and active participation in market competition. The accusations made by the US side are simply untenable.
The previous administration of the United States initiated the Section 301 investigation against China and imposed additional tariffs on China. It has been ruled by the World Trade Organization as violating WTO rules and has been opposed by many WTO members. The US side's initiation of a new Section 301 investigation for domestic political needs is a repeated mistake.
The Ministry of Commerce urges the US side to respect the facts and multilateral rules, immediately stop the wrong practices and return to the rules-based multilateral trading system. China will closely follow the progress of the investigation and will take all necessary measures to resolutely safeguard its own rights and interests.
The Predicament of the Textile Industry and the Pain of consumption
At the Port of Ningbo, the phenomenon of a sharp increase in import volume is particularly obvious. In response to the possible resumption of high tariffs in the future, enterprises have been accelerating their stockpiling, leading to a short-term surge in port throughput. However, behind this "rush to transport goods" lies the uncertainty of enterprises about the future. Meanwhile, some orders have quietly shifted to Southeast Asian countries, and domestic textile enterprises are facing the severe challenge of overcapacity. Take a certain fabric factory in Shaoxing as an example. Its order volume to the United States in 2025 was only 60% of that in 2024, forcing it to shift to the domestic sales market. However, the growth of domestic demand was sluggish, and the company's profit margin further shrank.
American consumers have not been spared from the impact of this trade game either. Data shows that the price of clothing has risen by 14%, and the price of shoes has increased by 15%. Low-income families lose about 1,300 US dollars each year due to the increase in prices. This kind of cost transfer not only weakens the competitiveness of Chinese textiles, but also makes American consumers the ultimate payers. The deep-seated contradiction lies in the fact that tariff exemption is only a stopgap measure.
Survival is the hard truth
Ultimately, the extension of tariff exemptions serves as a buffer zone in the game between China and the United States, but the textile industry must survive first. It is suggested that enterprises stockpile raw materials in the short term and look for alternative markets in the long term. The next three months will be a crucial window period. If there is no progress in the negotiations, the industry will face a greater impact.
From this perspective, exploring diversified markets is the inevitable path. The demand for Chinese textiles in the markets of ASEAN, the Middle East and Africa is steadily increasing. In the first quarter of 2025, China's textile exports to ASEAN increased year-on-year, which was higher than the negative growth of exports to the United States. Enterprises should seize this trend, adjust their market layout and reduce their reliance on the US market.
Technological upgrading and brand building are at the core of the sustainable development of the industry. Take a well-known textile enterprise in Guangdong as an example. By introducing intelligent production lines and strengthening brand marketing, its domestic sales revenue increased by 20% year-on-year in the first quarter of 2025, successfully offsets the negative impact of the decline in exports to the United States. This transformation not only enhances the enterprise's ability to resist risks, but also points out the direction for the future development of the industry.
At present, China's textile industry is facing the triple pressure of "order loss, rising costs and declining profits". The next three months will be a crucial period for industry adjustment. Enterprises need to strike a balance between "stockpiling for survival" and "transforming for development".
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