US-China trade war benefitting
Pakistan’s value-added sectors
Since mid-2018 the United States of
America and China have been locked in a trade confrontation
which has resulted in several rounds of retaliatory tariffs. The
US-China trade war has severely impacted Chinese exports to the
largest market in the world. While US consumers are paying
higher prices, Chinese exports have dropped drastically by 25%
in the first half of 2019.
According to a recent research paper by
UNCTAD, United States tariffs on China are resulting in an
increase in imports from the rest of the world, but only when
imports from China declined. China’s export losses in the
United States have resulted in trade diversion effects to the
advantage of Taiwan Province of China, Mexico, the European
Union, Viet Nam, India and Pakistan among others.
Pakistan is one of the beneficiaries from
these tariffs against Chinese goods by the US. The trade
diversion effect in Textiles and Apparel for Pakistan is US$25
million in the first half of 2019 while India, (US$ 41 million),
European Union (US$ 66 million), Republic of Korea (US$ 41
million) are other beneficiaries.
These facts are also validated by the
recent statistics released by the Trade Development Authority of
Pakistan for the first quarter 2019-20. Knitwear and Readymade
Garments have shown double-digit growth of 11.14% and 11.48%
while home textiles have also shown a 2.84% increase. It is also
encouraging to note the recovery of synthetic textile exports
with an increase in exports of 8.3%. Despite difficult times,
these are positive indications for the textile industry.
In the current issue, you will find
special reports on ITMA, Belgian companies and also an
introduction to the VDMA German textile machinery seminar
organised by the German Pakistan Chamber of Commerce and
Industry, representing the best of the textile machinery
manufacturers from Germany. We shall report on the sessions in
Karachi and Lahore in our coming issues.