On October 10 (local time), U.S. President Trump announced a major policy: starting from November 1, an additional 100% tariff will be imposed on all imported goods from China on top of the existing tariff rates, with textile products such as yarn included without exception. Combined with the existing Section 301 tariffs, the comprehensive tax rate for some yarn products has exceeded 50%, directly doubling the cost for enterprises to export to the U.S.

According to industry calculations, if U.S. orders are lost on a large scale, it will affect 2.5% of the total revenue of China’s domestic yarn industry, and small and medium-sized production capacities may face the risk of suspension.

This policy has also triggered heated discussions among netizens. Many people bluntly stated that “the U.S. creates all kinds of difficulties for China but cannot tolerate countermeasures from others.” For cross-border sellers, the sharp fluctuations in tariffs have become the norm, making it urgent to expand diversified markets and avoid single risks.

Is Trump serious this time?

A report by The New York Times on the 10th pointed out that the current U.S. tariff rate on Chinese goods has reached 30%, and for some products, it is even higher. Trump’s move will raise the import tariff on Chinese goods to over 130%, marking a sharp escalation of tensions between the world’s two largest economies. Earlier this year, after multiple rounds of tariff increases by the U.S. side, the tariff level imposed on China had reached 145%, almost bringing most of the trade between the two countries to a standstill. Later, China and the U.S. reached a tariff truce agreement to promote trade negotiations, gradually reducing the tariffs to 30%. The U.S. side’s re-implementation of the tariff threat this time will destroy the hard-won achievements obtained through multiple rounds of economic and trade consultations between China and the U.S.

The outside world has noticed that the negative effects of the current U.S. government shutdown are continuing to emerge, and Trump, who is already overwhelmed, recently failed in his attempt to obtain the Nobel Peace Prize. Some U.S. media analysts said that amid internal and external troubles and extreme dissatisfaction, Trump’s move to vent his anger over China’s new regulations may also be an attempt to divert domestic attention.

However, the sudden threat to raise the tariff rate on China by 100% has made the U.S. public opinion find it “unbelievable.” Whether this seemingly crazy figure will actually be implemented or is just another of Trump’s usual negotiation tactics has become the focus of controversy among all parties.

From the day before to the day when Trump announced the tariff increase, China had intensively introduced two countermeasures to respond accurately to the U.S. trade pressure.

On October 9, China’s Ministry of Commerce issued a notice, which not only further tightened the export control of primary rare earth products but also included rare earth mining and refining technologies and core equipment in the scope of export restrictions for the first time. As rare earths are key raw materials in the fields of intelligent manufacturing and new energy, this measure will directly affect the stability of the relevant industrial and supply chains in the U.S.

On October 10, China’s Ministry of Transport announced simultaneously that starting from October 14, an additional berthing fee will be charged for U.S.-flagged ships entering Chinese ports, with the charging standard being completely reciprocal to the fees previously imposed by the U.S. on Chinese ships. Data shows that maritime trade between China and the U.S. accounts for more than 70% of the total trade volume between the two countries. This measure will directly increase the costs of U.S. shipping companies, forcing them to re-evaluate the logistics costs of trade with China, and indirectly helping domestic export enterprises gain more bargaining power.

Faced with the tariff barriers in the U.S. market, emerging markets such as South America and Africa are becoming “safe havens” for yarn enterprises. Data shows that the import demand of Brazilian knitting factories for China’s vortex-spun and air-jet spun yarns has increased by 12% annually, and the import dependence of Argentine home textile enterprises on Chinese yarns exceeds 60%. Shandong Weiqiao has urgently participated in the Brazilian GTS Textile Exhibition and reached an intended order of 2 million U.S. dollars on the first day. “South American customers value cost-effectiveness more, and the price of our yarn per ton is 8% lower than that of similar products from India, which is our core advantage.”

Markets along the “Belt and Road” and among RCEP member countries also have great potential. In the first half of 2025, China’s yarn exports to Southeast Asia increased by 9.3%. Under the RCEP framework, 82% of yarn categories can enjoy tariff reductions or exemptions. After enterprises apply for preferential certificates of origin, the import tax in Cambodia can be gradually reduced from 15% to zero, significantly enhancing market competitiveness.

2. Product Breakthrough: High-Value-Added Yarns Resist Risks

In production workshops, production lines for antibacterial and cool-feeling yarns and graphene heat-conducting yarns are operating at full capacity. This type of functional yarn has high technological barriers, and even if the price is adjusted due to tariffs, U.S. customers can accept a price increase of up to 30%. In the future, increasing R&D investment in yarn products for outdoor clothing and medical fabrics will become a “fortress” for enterprises to resist tariff risks.

Industry trends also confirm this direction. In 2025, the global demand for environmentally friendly yarns will increase by 15%, and the premium space for intelligent fibers and recycled yarns is 2-3 times higher than that of conventional products. It is expected that the market share of high-end yarns will reach 35% by 2030, and technological upgrading has become the key for enterprises to break through difficulties.

Some enterprises choose to transit through Southeast Asia to reduce tariff costs, but compliance risks cannot be ignored. A yarn enterprise in Zhejiang was once determined by U.S. Customs as “originating from China” because it only carried out cutting and sewing in Cambodia without actually transferring the production process, resulting in a sudden 27.5-percentage-point increase in tariffs. After rectification, the enterprise transferred the yarn weaving process to the local area, and with a compliant Cambodian certificate of origin, the tax rate was reduced to 25.6%.

“Blockchain technology is solving the problem of supply chain traceability,” industry experts pointed out. By putting materials on the chain to display the entire production process in real time, the risk of origin fraud can be effectively avoided. At present, 6 leading yarn enterprises in Fujian have realized visualized supply chain management.

Although the U.S. market is facing shocks, the overall potential of the global yarn market remains. The global yarn market size will reach $43 billion in 2025, and the pattern where Asia accounts for more than 60% remains unchanged. The China National Textile and Apparel Council recommends that enterprises adopt a dual-line layout: domestically, explore segmented scenarios such as sportswear and medical fabrics to tap domestic consumer demand; internationally, leverage cross-border e-commerce to build DTC (Direct-to-Consumer) brands and directly reach overseas end customers.

“Tariffs forcing industrial upgrading may not be a bad thing,” analysts from the General Administration of Customs said. In the first three quarters of 2025, the number of domestic patent applications for intelligent yarns increased by 47% year-on-year. “The complete industrial chain supporting capacity of Chinese yarns is still a core advantage that Southeast Asia cannot replace. As long as the right direction is found, new opportunities can be seized in the changing situation.”