More than 400 participants attended the three-day 2019 International Congress of Textile Innovation for Sustainable Development that was held in Lima, Peru, from April 24– 26. The congress provided a good venue for networking and discussing the US Cotton Trust Protocol with trade and global industry experts. Cotton Council International (CCI) participated as an exclusive sponsor in the fiber category.

Speakers from Germany, Italy, France and the US shared latest industry development news, trends and technologies, challenging the Peruvian textile industry to think about how to compete in the global economy. Andrew Jordan, on behalf CCI, conducted a presentation addressing the US Cotton Trust Protocol and a recent micro-fiber study. The attendees received updates on improvement progress from the U.S. cotton industry, the US cotton industry’s commitment to building on its legacy of stewardship, as well as transparency and trust from the farm to the customer. CCI also shared a presentation on the Cotton USA licensing program and the participating global brands.

Representatives from leading companies such as Creditex, Nettalco, Topy Top, Tejidos San Jacinto, Peru Fashions, Textil Romosa and La Colonial attended the event. In addition, Jordan held seven face-to face meetings with US cotton fiber buyers and export manufacturers during the week in order to listen to them and ask them about concepts related to the U.S. Cotton Trust Protocol and gauge what the industry considers valuable.

The United States has escalated its trade war with China. The higher tariffs will be applied to relevant US-bound goods exported from China. Tariffs on targeted exports have increased from ten per cent to 25 per cent. China has pledged to take counter measures. The tariff hikes could hit growth in both economies and drag down global growth. US importers received just five days’ notice about the sudden rise in penalties. The tariff increase is seen as inflicting significant harm on US industry, farmers and consumers, decreasing the competitiveness of American companies and reducing the efficiency of their global supply chains. A 25 per cent tariff on apparel imports is expected to increase costs for a family of four by 500 dollars a year.

The US’ decision to impose new taxes on Chinese exports comes after the United States accused China of backtracking on commitments made during recent negotiations on trade. China has been accused of unfair trade practices, particularly with regards to access to its giant market, intellectual property and technology transfers.

The dispute has hurt Chinese exporters, damaged some US companies and slowed global growth since it began last July. The risk of a complete breakdown in trade talks has increased. Global stock markets have endured a week of extreme volatility.

In 2018 US textile and clothing imports rose in value terms to their second highest level on record and in volume terms to a record high. Within 2018 total, imports of fabrics, made-up textiles and apparel reached record highs in volume terms. Apparel continued to account for the biggest share of total imports. However, its share was down to its lowest level in several years. By contrast, there were significant increases in the shares of yarns, fabrics and made-up textiles. Meanwhile, the average price of US textile and clothing imports fell for the seventh year in succession to a record low—reflecting primarily a decline in the average price of imports from China.

In terms of fiber type, manmade fibers accounted for the largest share of US apparel imports for the fifth consecutive year. China remained by far the USA’s biggest textile and clothing supplier. Furthermore, its share of total US textile and clothing imports reached a record high in volume terms, although in value terms its share fell. Cambodia and Italy both increased their shares of US textile and clothing imports in value and volume terms but Honduras, Indonesia, Mexico and Pakistan suffered declines. Bangladesh, India and Vietnam, meanwhile, more or less maintained their market shares during the year.

The rapid deterioration of relations with the US has caught Chinese businesses off guard. Many companies find it difficult to shoulder the huge additional costs and lack viable options to immediately modify their supply chains. Some export industries in China will be hit harder than others with electronics, computer circuit boards, computer parts, furniture, floor coverings and automotive parts disproportionately burdened by the increased tariffs.

The US has increased tariffs on $200 billion worth of Chinese products from 10 to 25 per cent. Many businesses in China are already struggling to stay afloat since the US imposed 10 per cent tariffs in September last year. They say, while they tried to share these costs with their US counterparts, they will now have no choice but to pass on a significant proportion of the latest tariff increase to their customers. The uncertainty and volatility created by the trade war has led to businesses delaying investment and expansion plans. Some Chinese manufacturers have adjusted their supply chains by moving manufacturing and warehousing to south-east Asia, Mexico and Canada. But uprooting supply chains is costly, time-consuming and usually requires companies to obtain new approvals, comply with different regulatory regimes, secure real estate, build factories, hire workers and find new suppliers and service providers.