USA Increases Additional Tariff to 25% on US$ 200 billion Imports from China – An Opportunity for India’s Textiles Industry

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Shri Sanjay K Jain, Chairman, CITI stated that due to the ongoing trade war between the United States of America (USA) and China, the USA has hiked additional tariff to 25% on US$ 200 billion imports from China, applicable from 10th May 2019. He further stated that the additional tariff hike covers Textile Chapters: 50-60.

Mr. Sanjay Jain observed that CITI’s analysis of Chapters 50-60 which are part of the list of notified US$ 200 billion imports from China and on which additional tariff has been increased to 25% (as given below in Table 1) reveals that India is at an advantageous positiondue to tariff hike on China’s Textile Products and we must grab this opportunity to increase our share of Textiles exports to the USA.

Table 1: Summary of USA’s Imports of Textile Products from China on which Additional Tariff is increased from 10% to 25%

Chapter Description

No. of Tariff Lines

at 10-Digit

USA’s Imports from China (US$ million)

USA’s Imports from India (US$ million)

2018

2018

50

Silk

34

23.17

11.15

51

Wool

109

24.69

3.36

52

Cotton

520

207.69

97.30

53

Other Vagetable Fibres

61

35.34

57.62

54

Manmade Filaments

269

614.26

193.58

55

Manmade Staple Fibres

388

392.68

113.69

56

Nonwovens Cordage

77

709.69

95.02

57

Floor Coverings

74

737.85

906.47

58

Special Woven Fabrics

107

216.94

37.28

59

Coated and Industrial Fabrics

75

610.58

115.62

60

Knitted Fabrics

97

386.09

75.97

 

Total

1811

3959

1707

Source: Office of Textile and Apparel, USA

CITI Chairman mentioned that the value of above-mentioned textile products is approximately US$ 3.96 billion in 2018 which is only 2% of USA’s notified US$ 200 billion imports from China. Whereas, USA’s total imports of these textile products from India is approximately US$ 1.71 billion in 2018, which is 43% of USA’s imports from China. Out of the total textile products, cotton textiles account for the largest number of tariff-lines (520 at 10 digit level).  In terms of value, the most imported products belong to floor coverings, nonwoven cordage and manmade filaments.

Mr. Jain stated that the additional tariff hike does not include Garments and Made-ups Segments which means that there will be no additional advantage for the Apparel & Made-ups exporters from the above development.

Mr. Jain felt that the above-mentioned additional tariff hike provides an opportunity for the Indian Textile Industry to increase its exports to USA, particularly for the products belonging to the categories; cotton textiles, floor coverings, and manmade filaments.