China’s textile capital Suzhou was struggling before the trade war tariffs rises, now factories are closing their gates
- Over 500 companies in the eastern Chinese city exported 28 per cent less in the first four months of 2019 compared to the same time last year
- Woven fabric is included on the list of US$200 billion worth of Chinese goods now covered by the 25 per cent tariffs imposed by US President Donald Trump
On what would normally be a busy day, with waves of machinery noise echoing off the walls, Suzhou Jinzhu Air Jet Weaving Company remains eerily quiet, with only two staff members in their brown overalls sweeping the ground and flattening soil near the factory gate.
The 60 machines that would normally be producing cotton fabrics have been sitting idle for three days since the company sent its staff home for a one month “holiday”, according to a company notice dated less than two weeks earlier. The notice also explained that the holiday could be extended further.
A popular saying in China’s textile industry suggests manufacturers should focus their attention on foreign trade in the first half of the year and on domestic demand in the second, meaning exports normally prop up business before July.
But since June, Suzhou Jinzhu has not received a single order, which it blames on the US-China trade war. The woven fabric that makes it is included on the list of US$200 billion worth of Chinese goods which has been covered by a 10 per cent tariff since September and a 25 per cent tariff since May, although the company declined to comment on its level of exposure to the US market.
“The textile industry is facing an unprecedented situation, and our production and operations have become difficult,” the company notice explained.