Chinese textile industry pivots to new markets as US tariffs bite

A view of Lianyungang-based Feiyan Blanket Co in East China's Jiangsu Province on August 5, 2025 Photo: Tu Lei/ GT

Amid the roar of the production workshop, blankets emblazoned with the Superman logo cascade down like a colorful flood. The bright red cape patterns stretch endlessly along the conveyor belt, while workers in uniforms deftly fold and pack the finished products. After roughly 30 days at sea, these "Made in China" blankets will land on the shelves of major US supermarkets.

As a leading local textile company, Lianyungang-based Feiyan Blanket Co, founded in 2002, produces about 12,000 tons of blankets annually, with an output value of 250 million yuan. About 80 percent of its products are exported, mainly to the US.

Textiles have long been a traditional pillar industry in China, and Feiyan Blanket is just one example among many Chinese textile enterprises. In 2024, China's textile and apparel exports once again exceeded $300 billion, maintaining its position as the world's top exporter for 30 consecutive years.

However, the industry has faced an increasingly complex international environment, with exports experiencing fluctuations due to US tariff policies.

The impact of tariffs

Xu Yingxi, general manager of Feiyan Blanket Co, still vividly remembers the consequential moment in April.

"We originally had a major export project this year that was nearly finalized in April, involving about one million units of blankets. But due to the tariffs imposed in April, all exports came to a halt. Shipments only resumed in May, and so far, we've only exported just over 60,000 units," he told the Global Times.

On April 3, 2025, the US government declared it would impose sweeping tariffs against its trading partners, including China.

The drop from one million blankets to just over 60,000 was a direct consequence of the increased tariffs.

"Many of our products were supposed to be stocked in Walmart stores, which have strict scheduling requirements set months in advance. But when the orders didn't come through, the shelf space reserved for us was given to other companies," Xu explained.

"Orders are usually finalized between March and May, and June to October is the peak season for our industry. But the tariffs have completely disrupted our plans for the year," he said.

The textile industry has faced an increasingly complex international environment, with exports fluctuating in the second quarter due to US tariff policies. In the first half of the year, export value reached $73.46 billion, a slight decrease of 0.2 percent year-on-year. Exports to the US fell more sharply, dropping 5.3 percent, according to data from the China National Textile and Apparel Council.

The US tariffs impact not just the Chinese industry but the global textile industry as a whole. K. V. Srinivasan, President of the International Textile Manufacturers Federation (ITMF), said on April 4 that "these substantial tariff hikes will have a major impact on textile imports, particularly apparel, into the US."

Currently, approximately 95 percent of apparel sold in the US is imported, with the majority sourced from China (about 30 percent), Vietnam (13 percent), India (8 percent), Bangladesh (6 percent), and Indonesia (5.5 percent). To put this into perspective, these countries, which previously faced tariffs of 11-12 percent, will now see rates surge to 38-65 percent. In response, US apparel importers are seeking alternative sourcing options in countries with lower tariffs. However, many of these alternatives have higher production costs and often lack the required product ranges or production capacities, said Srinivasan.

China's textile industry started relatively early and has long-standing traditional advantages, particularly in the production and processing of raw materials, as well as in related textile technologies, including dyeing, weaving among other procedures, Zhou Mi, a senior research fellow at the Chinese Academy of International Trade and Economic Cooperation, told the Global Times on Tuesday, noting that these various segments are relatively well-developed.

Seeking a breakthrough

Despite the pressure from US tariffs, many industry representatives like Xu said that while US orders pose short-term challenges, companies have long been enhancing their core competitiveness, diversifying market strategies, and building international supply chains for the long term.

"Our exports to the US have dropped by 20 percent this year, but with some measures, we can compensate for these losses in the future," said Xu. "We're currently developing new products, such as modifying certain processes to strengthen customer loyalty. We're also focusing more on domestic sales, potentially developing new local clients to fill the gap."

Additionally, we are exploring emerging markets like South Africa and South America to expand our customers and boost exports, said Xu.

Fang Wujun, deputy general manager of Guangzhou Textiles Import &Export Group Co, said the company would also look at European and South American markets to compensate for losses, according to the CCTV News on April 27.

Founded in 1980, the company has long focused on the US as its key export market. Currently, the company's US business has come to a temporary standstill, with no new orders expected in the next three months. As a result, its overall business volume with the US has nearly halved.

To cope with that, the company will send more teams to countries like Cambodia, South Korea, Australia, and New Zealand, while also participating in trade fairs in the UK, France, and other European nations to seize opportunities under multilateral frameworks like RCEP and the Belt and Road Initiative. "The more uncertain the external environment, the more important a long-term strategy becomes," Fang said.

Who is paying the price?

When asked who ultimately bears the cost of the increased tariffs, Xu was unequivocal: the US customers.

"For us, price negotiations have become tougher. Buyers once had more margin and flexibility, but now they're much stricter on pricing," Xu said.

As the US government implements a new round of sweeping tariff adjustments, uncertainties loom over the US economy, while one thing becomes increasingly clear: prices are rising. From the first cup of coffee in the morning to daily essentials like shampoo, from air fryers to precision gears, Americans are set to shoulder more tariff costs, according to US media reports.

CNN reported on August 13 that Goldman Sachs economists estimated Americans "absorbed 22 percent of tariff costs through June," but that this share will rise to 67 percent by October if tariffs "follow the same pattern as the earliest ones."

Reshoring apparel manufacturing to the US would also pose significant challenges. Labor costs are substantially higher, and many essential textiles for apparel production would still need to be imported - now at increased costs, according ITMF President K. V. Srinivasan.

Zhou also said that the additional costs from tariffs would reduce consumer choices and spending in the US, which would have negative effects on the American economy and society.

For Xu, the uncertainty in the US has made diversifying exports a necessity.

Although cultivating stable clients can take years, or even over a decade, they have been seeking new opportunities elsewhere in the world.

"We've begun preliminary discussions with an industrial park in the UAE, that has an 8,000-square-meter factory. If the US imposes further tariffs, we'll quickly activate production there and re-export to other markets," he said.

Additionally, next month, the company plans to explore markets in South Africa and South America, visiting existing clients while expanding their customer base to support next year's growth.

"By expanding our global customer base and boosting domestic sales, we remain confident about our future prospects," Xu said.