US-China tariff war – The textile and apparel hit-list upda

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 2019, 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 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.

The additional 15% punitive rate (Tranche 4A) applied from 1 September 2019 to most apparel items (HS chapters 61 and 62) imported into the US from China. Additional apparel items – for which China's share of US world imports is largely more than 75% – were were set to see tariffs from 15 December 2019 (Tranche 4B). 

These moves marked the first time that all apparel, footwear and home textiles were caught in the trade spat since punitive tariffs were first introduced on US imports from China in July 2018. 

However, on 13 December 2019, the US reached a 'Phase One' trade agreement with China. As part of the deal, the Trump administration said the 15% punitive tariffs on Tranche 4A products would be reduced to 7.5% around 30 days after the signing of the agreement. It was officially signed on 15 January 2020, meaning the 15% punitive tariffs on Tranche 4A products were reduced to 7.5% from 14 February 2020. Meanwhile, the scheduled tariff increase for Tranche 4B products is currently suspended.

Although less impactful for the clothing sector, punitive tariffs on about $250bn of Chinese imports will continue. About US$3.7bn in textile imports into the US from China are affected, which applies to Tranches 1, 2 and 3. 

The tables below summarise the textile and apparel products covered by the US-China trade war and the tariff rates – and have been updated to reflect the latest moves.

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.