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US-CHINA TARIFF WAR – THE TEXTILE AND APPAREL HIT-LIST

By Dr Sheng Lu | 24 July 2019

With tariff hikes of up to 25% on top of the regular rate of duty on textiles and apparel imported into the US from China now increasingly likely, we take a look at the products on the hit-list.  

Punitive tariffs on US imports from China were first introduced in July last year, and subsequent product and tariff lists have edged closer and closer to including textiles and apparel.

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 List 4 covers all remaining Chinese imports that have not yet been hit – including all apparel, footwear, and manufactured textile products.

The tariff hike could be implemented any time after 2 July 2019 in any amount up to 25% on top of the regular rate of duty.

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

US Section 301 actions against Chinese products

Stage Punitive tariff rate & current status Products covered (8-digit HS code) Impact on textiles and apparel
Tranche 1 25% tariff rate, effective 6 July 2018: active 818 tariff lines (US$34bn imports) No textile and apparel products covered
Tranche 2 25% tariff rate, effective 23 August 2018: active 279 tariff lines (US$16bn imports) No textile and apparel products covered
Tranche 3 10% tariff rate, effective 24 September 2018;increased to 25% tariff rate, effective 10 May 2019: active 5,733 tariff lines (US$200bn imports) Around US$3.7bn textile products covered
Tranche 4 Up to 25% tariff rate: proposed 3,812 tariff lines (US$300bn imports) Around US$36bn textiles, apparel and home textile products covered

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

China’s tariff actions against US products

Stage Punitive tariff rate & current status Products covered (8-digit HS code) Impact on textiles and apparel
List 1 25% tariff rate, effective 16 July 2018: active 545 tariff lines (US$34bn imports) No textile and apparel products covered
List 2 25% tariff rate, effective 23 August 2018: active 333 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 2019 5,207 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: active 5,140 tariff lines (US$60bn imports) Around US$854m textile and apparel products covered

Note: HS Chapters 50 to 63; trade value in 2017 (data source: UNComtrade, 2019)

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

Description Number 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 50 Silk 13 6 (20% and 25%)
Chapter 51 Wool, fine or coarse animal hair; horsehair yarn and woven fabric 101 22 (20% and 25%)
Chapter 52 Cotton 233 76 (10%, 20% and 25%)
Chapter 53 Other vegetable textile fibres; paper yarn and woven fabric of paper yarn 31 5 (25%)
Chapter 54 Man-made filaments 131 89 (10%, 20% and 25%)
Chapter 55 Man-made staple fibres 132 84 (10%, 20% and 25%)
Chapter 56 Wadding, felt and nonwovens; special yarns, twine, cordage, ropes and cables and articles thereof 55 35 (10%, 20% and 25%)
Chapter 57 Carpets and other textile floor coverings 48 21 (10%, 20% and 25%)
Chapter 58 Special woven fabrics; tufted textile fabrics; lace, tapestries; trimmings; embroidery 72 39 (10%, 20% and 25%)
Chapter 59 Impregnated, coated, covered or laminated textile fabrics; textile articles of a kind suitable for industrial use 59 38 (10%, 20% and 25%)
Chapter 60 Knitted or crocheted fabrics 60 40 (10%, 20% and 25%)
Chapter 61 Articles of apparel and clothing accessories, knitted or crocheted 251 92 (10%, 20% and 25%)
Chapter 62 Articles of apparel and clothing accessories, not knitted or crocheted 395 120 (10%, 20% and 25%)
Chapter 63 Other made up textile articles; sets; worn clothing and worn textile articles; rags 99 57 (10%, 20% and 25%)
Total 1,680 724

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

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