The establishment of a reciprocal tariff reduction framework covering at least $30 billion in goods between China and the US could be a game-changer for the Chinese textile industry, which is currently in its traditional off-season. This signal directly targets core categories suppressed by Section 301 tariffs—textiles, apparel, footwear, and light industrial products—which currently face rates ranging from 7.5% to 25%. If implemented, it would substantially improve exporters' margins and price competitiveness.
Industry Impact of Tariff Adjustment
The core of this framework lies in reciprocity and scale. Both sides have agreed to discuss equal-scale product tariff reductions under the Trade Council, with each side covering $30 billion or more. This means the tariff barrier reduction is not a one-way concession but a structural adjustment based on bilateral trade balance. For the textile industry, this is not only a cost-side benefit but also a rebuilding of supply chain trust. Orders previously diverted to Southeast Asia due to tariff uncertainty are expected to accelerate their return as policy becomes clearer.
Market Data Shows Rebound
Even under tariff pressure, China's textile exports to the US have shown strong resilience. According to General Administration of Customs data, cumulative exports in the first five months of 2026 reached $19.104 billion, up 11.3% year-on-year. In April, monthly exports hit $4.11 billion, up 58% month-on-month and 40.4% year-on-year; May continued the trend with $4.52 billion, up 29% year-on-year. This rebound reflects the completeness and responsiveness of China's textile supply chain. Particularly after external shocks like the Hormuz Strait crisis, many orders originally destined for Southeast Asia have returned to China, further validating the irreplaceability of Chinese manufacturing.
Win-Win Logic and Industry Transmission
From a macro perspective, lowering tariffs on Chinese textiles also benefits the US. The US has a limited domestic textile industry; even if it doesn't import from China, it would need to source from Mexico or Southeast Asia. Direct tariff reductions can reduce intermediary costs, help ease domestic inflationary pressures, and benefit US consumers. The positive signals on tariffs following the meeting between the Chinese and US heads of state have provided a political foundation for advancing this framework.
For textile enterprises, the high value-added nature of the US market makes it a must-win. Over the past few years, companies have responded to tariffs through transshipment, overseas factories, etc., but with high costs and risks. Once tariffs are reduced to MFN rates, the overall competitiveness of Chinese textiles will significantly improve, especially in mid-to-high-end fabrics and garments.