In response to pressure from the US and Europe to limit Chinese textile exports, China raised tariffs by 400%, effective June 1, on 74 textile products whose US and European exports have grown the fastest. Experts said the move is aimed at resolving not only the trade dispute, but at easing broader economic tensions, including the controversy over China's fixed currency regime. China's textile makers, having spent US$14.3bn last year on building more factories, said local demand would offset any slowdown in orders from abroad, with a spokesman for
Shandong-based Weiqiao Textile Co., the country's largest cotton textile maker, saying the domestic market accounts for about 70% of the industry's growth, state media reported. Longer term, Chinese textile executives said the tariff hikes could hasten industry reforms, shaking out the smaller shops that shirk labor and environmental standards and shift the emphasis to design and branding. Meanwhile, the tariffs could hurt the foreign retailers who have already placed orders that are in the production pipeline.
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