miércoles, 18 de julio de 2018

The Textile Industry loves Trump's China Trade War


Matt Townsend


While there’s no shortage of doom and gloom coming from corporate America about President Donald Trump’s trade war with China, there is at least one U.S. industry cheering him on: textiles.


After decades of shedding thousands of jobs and closing factories as the U.S. opened up trade with China and other countries, textiles stabilized in recent years. And just as the sector was trying to invigorate growth, along came a presidential candidate pledging to revive American manufacturing.

The industry immediately saw Trump’s election as the best chance in a generation to reorient U.S. trade policy. And so far he hasn’t disappointed. The president withdrew America from negotiations on the Trans-Pacific Partnership (TPP) trade deal in his first week on the job. Now he’s enacted tariffs on $36 billion of Chinese-made goods, including some textiles, and wants to push that to $250 billion.

But the industry wants more. Textiles -- like fabrics and yarns -- are the materials used to make everything from clothing to seat belts. And duties on end, or finished, apparel and other goods from China would help domestic manufacturers compete better on price with Chinese companies and generate more orders for U.S.-made textiles, industry leaders say. Trump, however, largely avoided targeting consumer products for fear of upsetting voters who could face higher prices at the mall.

Crediting Trump

“We’ve got to do something to level the playing field with China,” said Michael Woody, chief executive officer of Trans-Tex LLC, a Cranston, Rhode Island-based maker of lanyards and shoelaces. “I give the president credit for trying to make something happen. For a U.S. manufacturer like my company, we want to see tariffs on end products.”

Placing duties on finished items is anathema to U.S. retailers and consumer brands that rely on Chinese goods, including $28 billion worth of apparel last year, to keep prices low for shoppers. They say levies will only increase price tags, and ultimately cost jobs.

The Trump administration largely avoided hitting consumers in the first round with 25 percent duties -- mostly on machinery -- that went into effect July 6. China matched those with retaliatory levies on goods from soybeans to electric cars, like Teslas.

Just four days later, the president responded with a proposal to put 10 percent levies on $200 billion of imports that included end products like handbags, baseball gloves and air conditioners. Also on the list were dog leashes, a smaller part of Trans-Tex’s business that Woody called “good news.”

And while apparel was spared, Trump has threatened putting tariffs on all Chinese imports, which last year totaled half a trillion dollars. That’s raised alarm bells around corporate America. Rick Helfenbein, president of the American Apparel & Footwear Association with members like Gap Inc. and Macy’s Inc., has started calling the proposed duties a “Trump tax.”

Consumers to Pay

“This will not do anything to help American workers, American consumers, or American businesses,” Helfenbein said in a statement after the $200 billion list was announced. “This will result in inflationary costs throughout the supply chain, ultimately paid for by American consumers.”

The textile and apparel manufacturing industries have little sympathy for companies railing against starting a trade war with China. It points to the U.S. opening up trade with China beginning in 2000 and China’s entrance a year later into the World Trade Organization -- thanks to the backing of then-president Bill Clinton -- as ushering in an era of domestic decline that has cost their sectors almost 800,000 jobs.

“To the retailing and importing community, guess what -- this is what President Trump campaigned on,” said Lloyd Wood, director of public affairs for the National Council of Textile Organizations. “They knew this was coming. If you chose to keep all your eggs in the China basket, that’s a risk you are knowingly taking.”

‘Quite Positive’

Since Trump was a candidate, he’s criticized America’s trade deficit with China, which reached a record $375 billion last year. If he’s serious about reducing it, obvious targets would be textiles and the products made from them. In 1999, the U.S. imported $8.5 billion worth of textiles and apparel from China, and only exported about $176 million there. Shoot forward to last year, when the U.S. imported $45 billion of those products from China, and exported less than $1 billion. That’s a trade gap of about $44 billion just for textiles and apparel.

That’s why Trump’s election generated so much optimism in the industry. In January 2017, shortly after Trump was sworn in, Chief Operating Officer Thomas Caudle of Unifi Inc. -- one of the largest U.S. yarn and fabric producers with about $670 million in annual sales -- said it has the “potential to be quite positive for us.” The president’s decision to pull out of the TPP would also save money for the company, located in the heart of what’s left of the U.S. textile industry in Greensboro, North Carolina. Unifi declined to comment for this story.

Shift West?

Since then, Trump’s saber-rattling has turned into a very public dispute with America’s largest trading partner.

It’s one that could shift production to North America and Central America, where free-trade agreements have boosted the prospects of companies like Unifi, according to Christopher McGinnis, an analyst for Sidoti & Co. U.S. textile-makers sell yarns and fabrics to companies like Nike Inc. and Abercrombie & Fitch Co., who then finish making the items in those regions and export them to the U.S. duty free. More protections against Chinese imports could also boost production in America, McGinnis said.

“If you are looking for a green shoot, this could be an industry that could benefit,” McGinnis said. “They’ve been beat up so much by China.”


Woody, the Trans-Tex CEO, has been on the front lines of competing against China for more than three decades, and in 2016 published “American Dragon,” a book based on those experiences. In the 1980s and 1990s, he was a sales executive at a pen maker, Quill Co., which was undercut by cheaper Chinese imports and later acquired by Newell Rubbermaid.

In 2008, Woody joined Trans-Tex, an 85-person company that goes head-to-head with China. It buys polyester material from a plant in North Carolina and uses it to make items such as branded lanyards for trade shows. It’s survived by turning around small orders fast -- about a third of its orders are shipped in 24 hours -- and pitching better quality and fewer hassles because U.S. customers don’t have to deal with overseas shipments.

But on big orders for 100,000 units, or more, that aren’t needed so quickly, Trans-Tex faces Chinese competitors who often quote prices at a third of what it can, Woody says. Even a 10 percent tariff -- like the one the Trump administration proposed last week -- would help the company consider matching the Chinese more, he said.

“It would make a big difference,” Woody said. “China is the issue.”

America's Largest Private Companies




Rank Company State Industry Revenue Employees
#1 Cargill Minnesota Food, Drink & Tobacco $109.7 B 150,000
#2 Koch Industries Kansas Multicompany $100 B 100,000
#3 Albertsons Idaho Food Markets $59.7 B 273,000
#4 Deloitte New York Business Services & Supplies $36.8 B 244,400
#5 PricewaterhouseCoopers - Business Services & Supplies $35.9 B 223,000
#6 Mars Virginia Food, Drink & Tobacco $35 B 80,000
#7 Publix Super Markets Florida Food Markets $34 B 191,000
#8 Bechtel California Construction $32.9 B 55,000
#9 Ernst & Young - Business Services & Supplies $29.6 B 231,000
#10 C&S Wholesale Grocers New Hampshire Food, Drink & Tobacco $28.1 B 17,500

#11 Reyes Holdings Illinois Food, Drink & Tobacco $26.5 B 31,000
#12 HE Butt Grocery Texas Food Markets $23 Be 101,000
#13 Enterprise Holdings Missouri Services $20.9 B 97,000
#14 Cox Enterprises Georgia Media $20.1 B 60,000
#15 Pilot Flying J Tennessee Convenience Stores & Gas Stations $19.6 B 27,100
#16 Meijer Michigan Food Markets $16.6 Be 77,000
#17 Southern Glazer's Wine & Spirits Florida Food, Drink & Tobacco $16.5 Be 22,000
#18 Love's Travel Stops & Country Stores Oklahoma Convenience Stores & Gas Stations $16 B 17,000
#19 Fidelity Investments Massachusetts Diversified Financials $15.9 Be 5,100
#20 JM Family Enterprises Florida Consumer Durables $14.9 B 4,200

#21 Gordon Food Service Michigan Food, Drink & Tobacco $12.9 B 17,000
#22 Toys 'R' Us New Jersey Retailing $11.5 B 64,000
#23 Allegis Group Maryland Business Services & Supplies $11.2 Be 15,000
#24 Hearst New York Media $10.8 B 20,000
#25 Southeastern Grocer Florida Food Markets $10.5 Be 66,000
#26 SC Johnson Wisconsin Household & Personal Products $10 Be 13,000
#27 Hy-Vee Iowa Food Markets $9.6 Be 82,000
#28 Menards Wisconsin Retailing $9.5 Be 45,000
#29 Bloomberg New York Business Services & Supplies $9.4 Be 19,000
#30 World Wide Technology Missouri Technology Hardware & Equipment $9.3 B 4,118

#31 Giant Eagle Pennsylvania Food Markets $9.3 B 32,000
#32 Medline Industries Illinois Health Care Equipment & Svcs $9.2 B 15,000
#33 QuikTrip Oklahoma Convenience Stores & Gas Stations $9.2 B 22,534
#34 Wawa Pennsylvania Convenience Stores & Gas Stations $9.1 B 28,700
#35 Amway Michigan Household & Personal Products $8.8 B 19,000
#36 Gulf States Toyota Texas Consumer Durables $8.8 B 2,000
#37 McKinsey & Company New York Business Services & Supplies $8.8 Be 14,000
#38 Kiewit Corporation Nebraska Construction $8.6 B 20,000
#39 Mansfield Energy Georgia Oil & Gas Operations $8.5 B 560
#40 Tenaska Nebraska Multicompany $8.4 B 650

#41 Wegmans Food Markets New York Food Markets $8.3 B 47,000
#42 RaceTrac Petroleum Georgia Convenience Stores & Gas Stations $7.9 B 8,282
#43 SHI International New Jersey Technology Hardware & Equipment $7.5 B 3,500
#44 Capital Group California Diversified Financials $7.3 Be 7,000
#45 ABC Supply Wisconsin Construction $7.2 Be 8,000
#46 Petsmart Arizona Retailing $7 Be 55,000
#47 Kingston Technology Company California Technology Hardware & Equipment $6.6 Be 3,000
#48 Edward Jones Missouri Diversified Financials $6.6 B 43,000
#49 Republic National Distributing Company Texas Food, Drink & Tobacco $6.5 B 9,500
#50 Perdue Maryland Food, Drink & Tobacco $6.5 B 21,000

#51 Rock Ventures Michigan Diversified Financials $6.5 B2 28,742
#52 Uber California Transportation $6.5 Be 12,000
#53 WinCo Foods Idaho Food Markets $6.5 B 17,000
#54 Trammo New York Trading Companies $6.5 Be 350
#55 Graybar Electric Missouri Capital Goods $6.4 B 8,500
#56 Sheetz Pennsylvania Convenience Stores & Gas Stations $6.4 Be 14,500
#57 Golden State Foods California Food, Drink & Tobacco $6.1 B 7,000
#58 OSI Group Illinois Food, Drink & Tobacco $6.1 Be 20,000
#59 Flex-N-Gate Illinois Consumer Durables $6 Be 13,000
#60 Kohler Wisconsin Construction $6 B 35,000

#61 JR Simplot Idaho Food, Drink & Tobacco $6 B2 10,000
#62 Momentive New York Chemicals $5.7 B 9,200
#63 Dot Foods Illinois Food, Drink & Tobacco $5.5 Be 4,500
#64 Eby-Brown Illinois Food, Drink & Tobacco $5.5 B 2,300
#65 Whiting-Turner Contracting Maryland Construction $5.5 Be 2,500
#66 Breakthru Beverage Group New York Food, Drink & Tobacco $5.4 Be 10,000
#67 CH2M Hill Cos Colorado Construction $5.2 B 20,000
#68 Energy Future Holdings Texas Utilities $5.2 Be 8,500
#69 Central National-Gottesman New York Materials $5.1 B 2,350
#70 Walsh Group Illinois Construction $5.1 Be 6,500

#71 Boston Consulting Group Massachusetts Business Services & Supplies $5 B 12,000
#72 HCR ManorCare Ohio Health Care Equipment & Svcs $5 Be 55,000
#73 Renco Group New York Materials $5 Be 12,000
#74 Schreiber Foods Wisconsin Food, Drink & Tobacco $5 Be 7,000
#75 Lansing Trade Group Kansas Business Services & Supplies $5 B 538
#76 Neiman Marcus Group Texas Retailing $5 B 14,300
#77 Clark Enterprises Maryland Construction $4.9 Be 4,200
#78 Gilbane Rhode Island Construction $4.9 B 2,738
#79 Academy Sports + Outdoors Texas Retailing $4.7 B2 23,000
#80 E&J Gallo Winery California Food, Drink & Tobacco $4.7 Be 6,500

#81 Scoular Nebraska Food, Drink & Tobacco $4.7 B 1,200
#82 Southwire Georgia Capital Goods $5.5 Be 7,500
#83 Sammons Enterprises Texas Multicompany $4.6 B 4,182
#84 American Tire Distributors Holdings North Carolina Consumer Durables $4.6 Be 4,700
#85 Ashley Furniture Industries Wisconsin Manufacturing $4.6 Be 23,000
#86 Consolidated Elec Distributors California Capital Goods $4.6 Be 6,200
#87 Bass Pro Shops Missouri Retailing $4.6 Be 22,000
#88 Levi Strauss & Co California Retailing $4.6 B 13,200
#89 Dole Food California Food, Drink & Tobacco $4.5 B 25,000
#90 The Kraft Group Massachusetts Materials $4.4 Be 9,500

#91 Carlson Minnesota Hotels, Restaurants & Leisure $4.4 Be 110,000
#92 Discount Tire Arizona Retailing $4.3 B 18,635
#93 Amsted Industries Illinois Capital Goods $4.3 Be 1,800
#94 Hobby Lobby Stores Oklahoma Retailing $4.3 Be 28,000
#95 Sinclair Oil Utah Oil & Gas Operations $4.3 Be 1,200
#96 Save Mart Supermarkets California Food Markets $4.2 B 15,500
#97 Stater Bros California Food Markets $4.2 Be 17,000
#98 Demoulas Super Markets Massachusetts Food Markets $4.1 Be 20,000
#99 InterTech Group South Carolina Chemicals $4.1 Be 15,000
#100 Petco Animal Supplies California Retailing $4.1 Be 25,000

#101 Structure Tone New York Construction $4 B 1,800
#102 DPR Construction California Construction $4 Be 2,600
#103 Forever 21 California Retailing $4 Be 30,000
#104 Hallmark Cards Missouri Media $4 B 27,000
#105 Red Apple Group New York Oil & Gas Operations $4 B 8,000
#106 Wonderful Company California Multicompany $4 B 8,500
#107 Asplundh Tree Expert Pennsylvania Business Services & Supplies $3.9 B 36,000
#108 Bose Massachusetts Technology Hardware & Equipment $3.8 Be 2,400
#109 HT Hackney Tennessee Food, Drink & Tobacco $3.8 Be 3,400
#110 Mortenson Minnesota Construction $3.8 Be 2,500

#111 New Balance Massachusetts Retailing $3.8 Be 5,000
#112 Swinerton California Construction $3.8 B 1,600
#113 Avaya California Telecommunications Services $3.7 B 11,700
#114 ADT Florida Business Services & Supplies $3.7 Be 7,000
#115 Belk North Carolina Retailing $3.7 Be 25,000
#116 Rich Products New York Food, Drink & Tobacco $3.6 B 11,000
#117 Services Group of America Arizona Food, Drink & Tobacco $3.6 B 3,600
#118 Zachry Group Texas Construction $3.6 B 22,000
#119 Hensel Phelps Construction Colorado Construction $3.5 B 3,188
#120 Golub New York Food Markets $3.5 Be 20,388

#121 Mary Kay Texas Household & Personal Products $3.5 B2 5,000
#122 VIZIO California Technology Hardware & Equipment $3.5 Be 490
#123 D&H Distributing Pennsylvania Technology Hardware & Equipment $3.5 B 1,157
#124 McCarthy Holdings Missouri Construction $3.5 B 3,676
#125 Carahsoft Virginia Technology Hardware & Equipment $3.4 B 538
#126 Fertitta Entertainment Texas Hotels, Restaurants & Leisure $3.4 B 60,000
#127 Ben E Keith Texas Food, Drink & Tobacco $3.4 Be 4,000
#128 Follett Illinois Retailing $3.4 B 8,000
#129 Apex Oil Missouri Oil & Gas Operations $3.4 Be 700
#130 Holiday Companies Minnesota Convenience Stores & Gas Stations $3.3 Be 6,000

#131 Iasis Healthcare Tennessee Health Care Equipment & Svcs $3.3 B 13,700
#132 ShopKo Stores Wisconsin Retailing $3.3 Be 18,000
#133 Black & Veatch Kansas Construction $3.2 B 10,422
#134 G-I Holdings New Jersey Construction $3.2 Be 3,000
#135 WL Gore & Associates Delaware Materials $3.2 B 9,600
#136 JE Dunn Construction Group Missouri Construction $3.2 Be 3,000
#137 Maines Paper & Food Service New York Food, Drink & Tobacco $3.2 Be 2,600
#138 Raley's California Food Markets $3.2 Be 12,000
#139 SAS North Carolina IT Software & Services $3.2 B 14,078
#140 The Nature's Bounty Co. New York Food, Drink & Tobacco $3.2 Be 13,000

#141 Young's Market California Food, Drink & Tobacco $3.2 B2 3,400
#142 Delaware North New York Business Services & Supplies $3.2 B 55,000
#143 Koch Foods Illinois Food, Drink & Tobacco $3.1 Be 14,000
#144 Life Care Centers of America Tennessee Health Care Equipment & Svcs $3.1 Be 40,000
#145 Rosen's Diversified Minnesota Food, Drink & Tobacco $3.1 Be 4,000
#146 JD Heiskell & Co California Food, Drink & Tobacco $3.1 B 475
#147 Univision Communications New York Media $3 B 4,000
#148 Shamrock Foods Arizona Food, Drink & Tobacco $3 Be 3,781
#149 Gates Corporation Colorado Materials $3 Be 14,000
#150 Golden Living Texas Health Care Equipment & Svcs $3 Be 40,000

#151 Great Lakes Cheese Ohio Food, Drink & Tobacco $3 Be 1,800
#152 Leprino Foods Colorado Food, Drink & Tobacco $3 Be 4,000
#153 Payless Holdings Kansas Retailing $3 Be 25,000
#154 Schwan Food Minnesota Food, Drink & Tobacco $3 Be 14,000
#155 Wilbur-Ellis California Chemicals $3 B 4,181
#156 Houchens Industries Kentucky Food Markets $3 B 18,013
#157 Crown Equipment Ohio Capital Goods $2.9 B 14,100
#158 Suffolk Construction Massachusetts Construction $2.9 B 1,715
#159 Holder Construction Georgia Construction $2.9 Be 1,000
#160 84 Lumber Pennsylvania Retailing $2.9 B 5,100

#161 Infor New York IT Software & Services $2.9 B 15,970
#162 Colonial Group Georgia Oil & Gas Operations $2.9 Be 1,100
#163 Ebsco Industries Alabama Multicompany $2.8 B2 5,800
#164 Latham & Watkins New York Services $2.8 Be 4,500
#165 Panda Restaurant Group California Hotels, Restaurants & Leisure $2.8 B 27,000
#166 Pratt Industries Georgia Materials $2.8 B 7,300
#167 Saltchuk Washington Transportation $2.8 B 5,500
#168 Hunt Consolidated/Hunt Oil Texas Oil & Gas Operations $2.7 Be 4,500
#169 Plastipak Holdings Michigan Materials $2.7 B 6,000
#170 Schnuck Markets Missouri Food Markets $2.7 B2 14,000

#171 Armada Pennsylvania Business Services & Supplies $2.7 B 460
#172 Aleris Ohio Materials $2.7 B 5,400
#173 Newegg.com California Retailing $2.7 Be 2,500
#174 Turner Industries Group Louisiana Construction $2.6 B 19,000
#175 Kirkland & Ellis Illinois Services $2.6 Be 3,400
#176 Oxbow Florida Utilities $2.6 Be 1,300
#177 J M Smith Corporation South Carolina Health Care Equipment & Svcs $2.6 Be 17,000
#178 Micro Electronics Ohio Retailing $2.6 Be 2,700
#179 Andersen Minnesota Construction $2.5 Be 11,000
#180 Brookshire Grocery Texas Food Markets $2.5 Be 13,000

#181 Continental Grain Company New York Food, Drink & Tobacco $2.5 Be 11,000
#182 Hilmar Cheese Company California Food, Drink & Tobacco $2.5 Be 1,400
#183 Red Lobster Florida Hotels, Restaurants & Leisure $2.5 Be 58,000
#184 Skadden New York Services $2.5 Be 4,300
#185 Tops Markets New York Food Markets $2.5 B 14,800
#186 Sigma Plastics Group New Jersey Materials $2.5 Be 5,000
#187 J. Crew New York Retailing $2.4 B 14,500
#188 Day & Zimmermann Pennsylvania Construction $2.4 B 42,000
#189 Advance Publications New York Media $2.4 Be 9,000
#190 Barton Malow Michigan Construction $2.4 Be 2,100

#191 Brasfield & Gorrie Alabama Construction $2.4 Be 2,600
#192 Jo-Ann Stores Ohio Retailing $2.4 Be 23,000
#193 K-VA-T Food Stores Virginia Food Markets $2.4 Be 15,000
#194 Signode Industrial Group Illinois Manufacturing $2.4 B2 7,000
#195 YP Georgia Business Services & Supplies $2.4 Be 5,000
#196 Arctic Slope Regional Corporation Alaska Multicompany $2.4 B 12,000
#197 Kum & Go Iowa Convenience Stores & Gas Stations $2.4 Be 4,700
#198 Thorntons Kentucky Convenience Stores & Gas Stations $2.4 Be 2,000
#199 Bain & Co Massachusetts Business Services & Supplies $2.3 Be 5,700
#200 Estes Express Lines Virginia Transportation $2.3 Be 16,500

#201 Foster Farms California Food, Drink & Tobacco $2.3 Be 12,000
#202 Fry's Electronics California Retailing $2.3 Be 14,000
#203 Novolex South Carolina Manufacturing $2.3 Be 7,000
#204 Ingram Industries Tennessee Multicompany $2.2 Be 5,000
#205 Bozzuto's Connecticut Food, Drink & Tobacco $2.2 Be 3,500
#206 BrightView Maryland Business Services & Supplies $2.2 B 22,000
#207 Carpenter Co Virginia Materials $2.2 B2 5,500
#208 Drummond Alabama Utilities $2.2 Be 6,000
#209 Guitar Center California Hotels, Restaurants & Leisure $2.2 Be 10,000
#210 Heico Cos Illinois Capital Goods $2.2 Be 9,200