By  on December 29, 2004

WASHINGTON — China will impose tariffs on 148 categories starting Saturday in an apparent response to international pressure to control its apparel and textile exports.

The move coincides with the elimination of the remaining vestiges of a 30-year-old quota system among World Trade Organization member countries.

The Chinese government said it will levy duties ranging from 2.4 cents to 3.6 cents per piece or per set of clothing, and 6 cents per kilogram for parts or accessories. Among the targeted export categories are T-shirts, underwear, nightwear and robes, outerwear, trousers, blouses and tracksuits. (See related table below.)

China exported $139.1 million in cotton trousers to the U.S. for the year ended Oct. 31. China could conceivably collect $3.3 million to $5 million in tariffs in that category alone. Similarly, imports of cotton dressing gowns from China totaled $132.1 million during the first 10 months of the year. Chinese tariffs would range from $3.1 million to $4.8 million.

The Chinese Ministry of Commerce caught industry observers off guard in mid-December when it announced it would tax its own exports. Lobbyists and industry executives said the move was meant to demonstrate the country is controlling its industry’s growth in commodity products and to assuage global fears that its apparel exports will decimate industries around the world and imperil some 30 million jobs in the developing world when quotas are lifted.

Industry veterans also have speculated that China made the move to recoup some of the revenue it will lose when the quota system expires and quota charges are dropped. Quotas have long been traded as a commodity in countries such as China, with prices rising as product categories began to be filled by the end of the year.

Executives reacting to the recent export tariff list claimed that, although the tariffs are relatively miniscule, they add to the overall cost of the garment and eat into profit margins.

In the long run, the tariffs are not expected to curtail the overall massive growth in China’s apparel exports, although they could discourage price slashing and encourage the Chinese to focus on better merchandise. U.S. importers and retailers said unexpected additional costs are difficult to absorb, but claimed the tariffs would not force them to pull business out of China.

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