Tariffs on textile and apparel products are edging closer in the US-China tariff war

Tariffs on textile and apparel products are edging closer in the US-China tariff war

Amid the rapidly shifting goalposts of the US-China tariff war and the imminent addition of punitive duties on textiles and apparel imported into the US from China, we've taken an updated look at the latest actions and the products on the hit-list.

The stakes were upped in the tit-for-tat trade war between the US and China on 1 August, when the Trump administration announced plans to impose an additional 10% punitive tariff on US$300bn of imports from China – including, for the first time, almost all textiles and apparel. 

Then, on 23 August, after China outlined its latest retaliatory measures against US products, President Trump decided the scheduled punitive tariff rate would rise from 10% to 15%. This is on top of the most favoured nation (MFN) rate applied by the WTO on US imports from China – which averaged 14.4% for knitted apparel (HS chapter 61) and 10.4% for woven apparel (HS chapter 62) in 2018.

Most apparel items (HS chapters 61 and 62) imported into the US from China will be subject to the additional 15% punitive rate starting from 1 September 2019 (Tranche 4A). However, tariffs on some  apparel items – for which China's share of US world imports is largely more than 75% – will be delayed until 15 December 2019 (Tranche 4B). 

The moves mark the first time that all apparel, footwear and home textiles have been caught in the trade spat since punitive tariffs were first introduced on US imports from China in July last year. 

Although less impactful for the clothing sector, Trump's end-of August decision to raise the tariff rate also meant punitive tariffs on $250bn in Chinese goods will rise from 25% to 30% on 1 October. About US$3.7bn in textile imports into the US from China will be affected. The first table below has now been updated to reflect this move.

The US tariff action was instigated by a Section 301 investigation into China's acts, policies, and practices related to technology transfer, intellectual property and innovation, and the final Tranche 4A and 4B lists cover the majority of Chinese imports that have not yet been penalised.

Below is a summary of the textile and apparel products covered by the US-China trade war and the tariff rates so far. 

A full listing of every single product on the US-China textile and apparel hit-list is available on the re:source by just-style strategic sourcing tool.

US Section 301 actions against Chinese products

StagePunitive tariff rate & current statusProducts covered (8-digit HS code)Impact on textiles and apparel
Tranche 125% tariff rate, effective 6 July 2018 - 30 September 2019; scheduled to increase to 30%, effective 15 October 2019: active818 tariff lines (US$34bn imports)No textile and apparel products covered
Tranche 225% tariff rate, effective 23 August 2018 - 30 September 2019; scheduled to increase to 30%, effective 15 October 2019: active279 tariff lines (US$16bn imports)No textile and apparel products covered
Tranche 310% tariff rate, effective 24 September 2018; increased to 25% tariff rate, effective 10 May 2019 - 30 September 2019; scheduled to increase to 30%, effective 15 October 2019: active5,733 tariff lines (US$200bn imports)Around US$3.7bn textile products covered
Tranche 4A15% tariff rate (was 10%), effective 1 September 2019: active3,243 tariff lines (US$112bn imports)Around US$31bn textile, apparel and home textile products covered
Tranche 4B15% tariff rate (was 10%), effective 15 December 2019: active555 tariff lines (US$160bn imports)Around US$4.7bn textile, apparel and home textile products covered

Note: HS Chapters 50 to 63; trade value in 2018 (data source: USTR, 2019; USITC, 2019)

China’s tariff actions against US products

StagePunitive tariff rate & current statusProducts covered (8-digit HS code)Impact on textiles and apparel
List 125% tariff rate, effective 16 July 2018: active545 tariff lines (US$34bn imports)No textile and apparel products covered
List 225% tariff rate, effective 23 August 2018: active333 tariff lines (US$16bn imports)No textile and apparel products covered
List 3 (2018)5%, 10%, 20% and 25% tariff rates, effective 24 September 2018: the tariff rates and product list were updated in June 20195,207 tariff lines (US$60bn imports)Around US$486m textile and apparel products covered
Updated List 3 (2019)5%, 10%, 20% and 25% tariff rates, effective 1 June 2019: active5,140 tariff lines (US$60bn imports)Around US$854m textile and apparel products covered
List 4-15%, 10% tariff, effective 1 September 2019: active1,717 tariff lines (List 4-1 and 4-2 combined around US$75bn imports)Around US$19.5m textile and apparel products covered
List 4-25%, 10% tariff, effective 15 December 2019: active3,361 tariff lines (List 4-1 and 4-2 combined around US$75bn imports)Around US$1,363m textile and apparel products covered

Note: HS Chapters 50 to 63; trade value in 2017 (data source: US International Trade Commission, 2019; MOFCOM, 2019)

Textile and apparel products covered by the US-China tariff war (June 2019)

HS ChapterDescriptionNumber of 8-digit HS codes covered by US Tranche 3&4 lists (25% punitive tariff rate)Number of 8-digit HS codes covered by China’s tariff action (list 3 updated in June 2019) + punitive tariff rates
Chapter 50Silk136 (20% and 25%)
Chapter 51Wool, fine or coarse animal hair; horsehair yarn and woven fabric10122 (20% and 25%)
Chapter 52Cotton23376 (10%, 20% and 25%)
Chapter 53Other vegetable textile fibres; paper yarn and woven fabric of paper yarn315 (25%)
Chapter 54Man-made filaments13189 (10%, 20% and 25%)
Chapter 55Man-made staple fibres13284 (10%, 20% and 25%)
Chapter 56Wadding, felt and nonwovens; special yarns, twine, cordage, ropes and cables and articles thereof5535 (10%, 20% and 25%)
Chapter 57Carpets and other textile floor coverings4821 (10%, 20% and 25%)
Chapter 58Special woven fabrics; tufted textile fabrics; lace, tapestries; trimmings; embroidery7239 (10%, 20% and 25%)
Chapter 59Impregnated, coated, covered or laminated textile fabrics; textile articles of a kind suitable for industrial use5938 (10%, 20% and 25%)
Chapter 60Knitted or crocheted fabrics6040 (10%, 20% and 25%)
Chapter 61Articles of apparel and clothing accessories, knitted or crocheted25192 (10%, 20% and 25%)
Chapter 62Articles of apparel and clothing accessories, not knitted or crocheted395120 (10%, 20% and 25%)
Chapter 63Other made up textile articles; sets; worn clothing and worn textile articles; rags9957 (10%, 20% and 25%)
Total1,680724

US textiles and apparel covered by China's List 4 retaliation (23 August 2019)

CodeNumber of HS codes (10-digit)Punitive tariff rateEffective dateValue of US exports to China in 2018 (US$m)*
List 4-17410%1 September 2019$19.5
List 4-2 part 14910%15 December 2019$26.7
List 4-2 part 21405%15 December 2019$983.4
List 4-2 part 34445%15 December 2019$353.0
List 4-2 total633$1,363.1

*Trade data source: USITC (2019)

Appendix: Textile and apparel products covered by the US-China tariff war (as of August 2019):