As the heat brought by the Geneva negotiations between China and the United States gradually fades, the expected US orders seem to have not been issued yet

The tax has been reduced, but the bill hasn't arrived yet

Last week, due to the heated discussions between China and the United States, polyester raw materials saw a significant increase. However, when it came to actual order negotiations, textile professionals discovered that although both sides significantly reduced the additional tax rates after the talks, the current tariff rates for most textile and clothing exports to the United States are still above 40%. Only products with high added value have the ability to absorb the tariffs and continue to be exported to the US market. According to the research, there has been an increase in downstream customers inquiring about prices recently. Some textile companies have signed a small number of new orders, but most companies have not yet signed new orders with customers. Most textile enterprises have meager profits, but customers are still pressing down on prices. The price game between textile enterprises and downstream customers may be deadlocked, and exports to the United States still face significant resistance. Since the beginning of this year, the trade war between China and the United States has seriously affected market confidence, and the economic recession in Europe is also worrying. According to downstream customers, orders in Europe have decreased by about half year-on-year since 2025, with only Middle Eastern workwear orders and Southeast Asian military uniform orders relatively stable. However, the quantity is limited and cannot compensate for the losses caused by the lack of orders in the US and Europe. Some textile companies have been forced to reduce production or even close down. The leaking house is facing continuous rain, and Europe's import policies are also tightening.
 

EU plans to impose taxes on small packages

On May 20th local time, foreign media reported that the European Union announced plans to cancel the tax-free policy for small packages (imported small packages worth less than 150 euros, about 1225.1 yuan), and at the same time, impose a unified fee of 2 euros (about 16.335 yuan) per small package that enters the EU and is directly shipped to consumers' homes. If the small package is first transported to a warehouse within the European Union for storage, a fee of 0.5 euros (approximately 4.084 yuan) will be charged per item. It is reported that the EU encourages e-commerce platforms to centralize shipments to warehouses within the EU before delivery.

This policy is also influenced by the international environmental linkage effect: for example, the United States has reduced the applicable tariff for the $800 tax-free quota from 54% to 30%; Australia cancels GST exemption for goods under AUD 1000 in 2024; Japan plans to revise the Tariff Rate Law in 2025 to strengthen the supervision of small parcels. Taking Temu as an example, the average unit price per customer is about 25 US dollars (approximately 23 euros). In direct mail mode: 2 euros/order ≈ 8.7% of the product price. In warehouse shipping mode: 0.5 euros+storage cost ≈ 3-5% increase in overall cost. The EU's plan to impose taxes on small packages will greatly affect the export of textile cross-border e-commerce.

The market downturn is difficult to reverse

Although the tax rate has been reduced, the 301 tariff that was originally imposed in 2018, combined with a 20% fentanyl tariff, and the remaining 10% tax rate after later negotiations, add up to nearly 50%. For ordinary distributors, the competitiveness of most products in the textile industry, which has already reached the sky, is still limited under this tariff. However, in contrast, Southeast Asian countries and other countries are currently in a suspended phase of equivalent tariffs, with only an additional 10% tariff levied during this period. Therefore, exports to the United States remain strong, and the amount of Chinese textile exports to these countries is increasing instead of decreasing. This also confirms some previous speculations that whichever side has a lower tax rate will become a "Yangcheng Lake". Therefore, we can see that in April, China's exports even showed a year-on-year increase, which is significantly different from the expected reduction due to tariff issues. As temperatures rise, the polyester filament and textile industries will gradually enter the traditional off-season of demand, and orders from the United States may increase. However, considering the continuously suppressed demand by inflation in the United States, as well as high production capacity and inventory, these increases are difficult to reverse the decline of the textile market in recent years.