U.S. Textile Orders May Be Rushed in Anticipation of Tariff Increases
As one of the world’s most developed nations, the United States remains a crucial market for textile products, both directly and indirectly. Whether exporting textiles directly to the U.S. or sending fabrics to Mexico and Southeast Asian countries for garment manufacturing, the vast American market plays a pivotal role in China’s textile exports. However, with recent gun violence incidents and the increasing likelihood of Trump’s victory in the upcoming election, concerns are rising over potential tariff hikes, which may prompt some orders to be placed earlier than usual.
Early Peak Season at West Coast Ports
The crisis in the Red Sea has led to tight shipping capacity and rising freight costs, prompting U.S. importers to begin stockpiling goods now. Matt Priest, President of the Footwear Distributors and Retailers of America (FDRA), noted that current shipping costs are higher than they were over two years ago. This surge in demand is partly driven by the impending tariffs set to take effect on August 1, motivating importers to expedite their shipments.
Another concern is the possibility of former President Trump winning the election in November. His campaign team has proposed significant tariff increases, which has led many FDRA members to consider bringing products into the U.S. before any potential tariff hikes are decided.
Gene Seroka, Executive Director of the Port of Los Angeles, highlighted that if Trump wins, a 10% general tariff on imports and a 60% tariff on Chinese goods could dramatically alter the port’s future landscape. Despite the uncertainty, Seroka emphasized the port’s adaptability since Trump’s initial tariff imposition in 2018, which has led to aggressive procurement practices among importers.
Roger, a long-time industry professional in California, pointed out that the upcoming U.S. election is a key factor influencing importers’ decisions to replenish inventory. Should Trump be re-elected, additional tariffs on Chinese goods are highly likely, potentially exacerbating retail price inflation. Importers might stock up in advance to mitigate the impact of these anticipated tariff changes.
Strong Growth in U.S. West Coast Trade
The first half of 2024 saw robust trade growth at U.S. West Coast ports. The Port of Los Angeles handled 4.7 million TEUs, marking a 14.4% year-on-year increase. Seroka attributed this growth to declining inflation, rising wages, and a strong job market, which have collectively boosted consumer spending and stabilized freight volumes.
Similarly, the Port of Long Beach achieved record-breaking container throughput in June, with inbound container volumes reaching their highest levels since mid-2022. The port’s overall container volume for the first half of 2024 grew by 15% compared to the same period last year. Mario Cordero, CEO of the Port of Long Beach, expressed optimism for moderate growth in the second half of 2024, driven by a resurgent market share and increased consumer spending.
Despite September not traditionally being a peak season, concerns over additional tariffs on Chinese goods and the impact of labor strikes at East Coast and Gulf Coast ports have accelerated the peak season on the West Coast. On May 14, the U.S. announced a four-year review of the Section 301 tariffs on Chinese goods, resulting in higher tariffs on a range of products starting August 1. The subsequent rounds of tariff hikes are scheduled to take effect in 2025 and 2026.
In response, the Chinese Ministry of Commerce issued a statement strongly opposing the U.S. decision, criticizing the politicization of trade issues and reiterating that the tariffs violate WTO rules. The Chinese government has made its dissatisfaction clear, highlighting the potential for continued economic tension between the two nations.
