Trump's 145% tariff on Chinese products is turning into a knotty problem for the garment industry hub of Guangzhou.
According to the US International Trade Commission, China sold $439 billion worth of goods to the US in 2024. Of these, apparel — knitted or crocheted — accounted for $9.9 billion of exports; apparel — not knitted or crocheted — for $7.3 billion of exports and Made-up textile items for $8.6 billion of exports.
These big numbers played a significant part in allowing many blue-collar workers in Guangzhou — almost all of them poorly educated — to earn over $60 a day (over Rs 5000). Now all that is at risk.
According to a New York Times article at least nine factory owners and managers in Guangzhou were contemplating shifting their operations to lower-wage centres like Hubei, almost 970 km away.
Some of the owners were also wondering whether they should head to Vietnam or other countries to avoid the deathly burden Trump's tariffs imposed on them.
The worries of these owners have also been exacerbated by the fact that the Chinese economy has cooled off ever since the collapse of the real-estate market there.
As soon as Trump announced his war on Chinese products, the Communist government stepped in and pushed e-commerce platforms in China to come to the aid of all small businesses in distress.
But with customers staying watchful with their money in the mainland, selling through these platforms has been of little help, the New York Times observed.
It must be noted that according to estimates, between 80 billion and 150 billion garments are produced in a year across the globe. About 10% to 40% of these remain unsold — that is between eight billion to 60 billion garments every year. These Chinese suppliers are battling to keep their products away from that pile.
Interestingly, China's clothing industry produces around two-thirds of the world's clothes. According to Chinese government statistics, more than 26 million tons of clothes are already being thrown away in the country every year. This is because the clothing industry there is dominated by "fast fashion" — cheap clothes made from unrecyclable synthetics, not cotton. Will the Trump tariffs add to the problem?
