The Sino-U.S. trade war has begun. In the short term, due to the tariffs on imports from China to the United States, global brand clothing brands will definitely reduce orders from mainland companies and transfer orders to Taiwanese companies in order to avoid being involved, whether in fact or in a risk-averse mentality. Starting from the second half of the year, the domestic textile industry is expected to have a transfer order effect.
However, in the long term, emerging textile fiber supply chains in Vietnam, Cambodia and other Southeast Asia are gradually taking shape, and they have cost advantages. Global apparel factories’ purchasing power from Southeast Asia will definitely increase year by year in the next 3-5 years. , it is bound to grab orders from Taiwan. Therefore, the market expects that if the Sino-US trade war continues, it will be “short-term and long-term” for the domestic textile industry.
New Fiber and Lili believe that in the short term, the Sino-US trade war will mainly have an impact on semiconductors and other electronic products, and will not have an impact on the textile industry for the time being. On the contrary, some brand clothing factories will definitely Reduce orders from mainland China and shift to Taiwan. Starting from the third quarter, domestic textile factories will have a somewhat re-ordering effect.
The market pointed out that the order volume of downstream garment foundries has indeed increased compared with last year. Among them, the order volume of Ruhong and Guangyue has been received in the first quarter of next year, and the order visibility of Juyang has also seen the fourth quarter.
Although there is no significant growth in the upper and midstream, Far East New’s order volume this year did increase by 5-10% compared with last year; New Fiber also expressed optimism about the order reception situation this year.
Jisheng, whose export value accounts for more than 40% of its overall revenue, said that judging from the order reception situation, in the past few years, the visibility of orders would decrease by the end of the second quarter, but by the end of July this year, there is no risk of orders. In addition to the rebound in the business of brand clothing factories and stronger order placement, the start of the Sino-US trade war has dispersed orders from mainland China and increased them to Taiwan and Southeast Asia. This is also one of the reasons why orders in July were higher than in previous years.
However, the textile industry believes that if the Sino-US trade war really expands, not only China and the United States, but also Taiwan’s entire manufacturing supply chain will be implicated, and the textile industry is no exception.
If we get to that point, the textile industry expects that apparel customers will move their supply chains from China to Southeast Asia in order to avoid the impact of tariffs. At the request of customers, Taiwan’s textile industry will certainly do the same in order to gain more markets. follow.
The market emphasizes that the Sino-US trade war will set off another wave of investment in the domestic textile industry out of Taiwan and into Southeast Asia such as Vietnam; this time it is not just downstream foundries such as Ruhong and Juyang that are pursuing low-cost departures. Instead, the domestic textile industry will inevitably face the erosion of “hollowing out” due to the comprehensive layout of upstream and midstream manufacturers such as Far East New, Nanfang, and Lili. (Title: Sino-US trade war, short-term and long-term shortcomings in the textile industry)
