The European textile industry has found itself ensared in the U.S.-China trade war even without participating in it.
The issue is the falloff of U.S. imports of Chinese fabrics, with tariffs put in place as the trade impasse intensified. In the year to date through July, first U.S. fabric imports from China fell 22.36 percent in value to $885.62 million compared to the same period last year.
For the 12 months through July, China’s market share of fabric imports was down to 27.34 percent, as shipments were 7.52 percent below the previous year, indicating that the rate of fabric import decline picked up as the threat of tariffs intensified.
In turn, many Chinese mills have looked to other exports markets for growth.
“We seem to be seeing some effects of the trade measures taken in the U.S., with some Chinese exports being diverted to the European market,” Frederic Van Houte, director general of CIRFS, the European man-made fibers association, told executives at the National Council of Textile Organization’s Fall Fiber Meeting last week. “And the pressure is increasing on European textile manufacturers as a result.”
Van Houte noted that the European textile industry specializes in man-made fibers, notably polyester, nylon, acrylic and polypropylene. Also not helping the industry is that the euro is strengthening against the dollar, which hurts apparel and textile exports.
Overall, he said, “The economic situation is not so good, with consumption continuing to be sluggish.” Van Houte noted that 1.1 percent gross domestic product growth expected in the Eurozone in 2019.
Central Europe is growing more steadily, with countries such as Poland and Hungry leading the way.
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“Turkey, a big player in terms of textiles, should be watched,” he said. “Its economy is in recession, so negative growth (of about 1.4 percent) is forecast for this year. The forecast is of a slowdown for some countries, even a recession, and some growth for others countries.”
In the area of trade, Van Houte noted that the European Union (EU)-Canada free trade agreement (FTA) that has been provisionally implemented has already led to increased Canadian exports to the EU. The EU-Japan FTA went into effect in February, also with increased bilateral trade, and an EU-Vietnam FTA likely will enter into force in early 2020.
“CIRFS was very much against this agreement,” he said, noting the negative impact it is seen having on EU textile firms from cheap Vietnamese imports.
Environmental issues are vital in the EU, Van Houte said, with climate change high on the agenda. “There is a big push in the EU to reduce greenhouse gas emissions,” he said.
In addition, increased REACH chemical standards and regulations, and potential legislation on microplastics pollution are on the docket, with the textile industry in the crosshairs.
“The EU also wants to make the circular economy–recycle, reuse, reduction of waste–a priority,” he added. “The textile industry is also seen as important in this effort.”