“Reciprocal Tariffs” Spark a New Global Market Pattern for the Sewing Machine Industry Chain

With the United States recklessly swinging its "reciprocal tariffs" policy, major downstream industries of textile and apparel, footwear and bags, home textiles, and other sewing equipment are facing unprecedented changes and challenges globally. This will have direct and profound impacts on China’s sewing machine industry.

U.S. Tariffs Place Enormous Pressure on the Sewing Machine Industry’s Downstream Supply Chain

Since April, the U.S. "reciprocal tariffs" policy has been implemented, with China at the forefront, bearing the brunt of multiple rounds of trade sanctions. As of now, the main downstream industries of sewing equipment—such as textile and apparel, footwear and bags, home textiles, and down and leather—are facing tariffs as high as 145% on exports to the U.S. Chinese companies in relevant industries are experiencing multiple impacts, including halted orders, order cancellations, and supply chain restructuring, with some factories already halting production.

Under the “reciprocal tariffs” policy, Southeast Asian countries, important global manufacturing bases, are also under immense pressure. Here’s a breakdown of the situation by country:

Vietnam: As the U.S.’s largest supplier of apparel and footwear (exporting $44 billion to the U.S. in 2024), some core subcontracting orders were heavily impacted. Nike orders piled up in Vietnam’s Binh Duong province, turning from 20% profit to 30% loss. Some factories were forced to halt production, and some Chinese and Korean-owned factories saw canceled orders, leading to shutdowns. There’s also a severe labor shortage, with many frontline workers moving to the electronics manufacturing sector.

Cambodia: Since last year, Cambodia has attracted a large number of companies to set up factories. However, after the new tariffs were imposed, some apparel factories started receiving order cancellations from U.S. customers, requiring factories to bear the tariff costs. With subcontracting profits typically under 10%, some factories have seen production rates drop to below 50%, and small to medium enterprises face closure. There is also a labor shortage, and labor costs are rapidly rising.

Pakistan: The textile and apparel industry is a pillar of Pakistan's economy, making up 57% to 60.8% of exports, with the U.S. being the second-largest export market after the EU. Due to the new U.S. tariffs, some companies have seen a noticeable drop in future orders, with many halting planned investments and putting expansion and technology upgrades on hold.

Bangladesh: With a $7 billion export value to the U.S. for apparel, accounting for 80% of Bangladesh’s total exports, the sharp rise in tariffs has led to reductions in production and layoffs in some factories. It is estimated that Thailand’s apparel exports will drop by 25% this year.

Myanmar: Myanmar’s products mainly go to Europe and Japan, so they haven’t been directly impacted by the U.S. tariffs, and the production scheduling of local enterprises remains relatively normal.

India: Although the tariff rate (26%) is lower than that in Southeast Asia, the lack of a complete industrial chain means that India’s related industries still suffer from a chain reaction.

In contrast, Indonesia has become a new investment hotspot in the sewing industry, replacing Cambodia. Despite the U.S. imposing a 32% tariff, the textile and apparel products are not included in the additional tariff list. Furthermore, Indonesia has low labor costs, with monthly wages under 2,000 RMB.

It’s also worth noting that U.S. tariffs are exacerbating the uncertainty of global trade rules. In the short to medium term, this will have a direct impact on global economic recovery and the warming of consumer demand in various countries. WTO Director-General Ngozi Okonjo-Iweala believes that U.S. tariffs could lead to a 1% contraction in global goods trade this year. The continuation of future orders and the normalization of goods delivery are widespread concerns for industry chain-related enterprises.

Under the escalating pressure of tariffs, China-US sewing machine trade is approaching a standstill.

From the perspective of the sewing machinery industry, the United States is China's seventh-largest export market for sewing machines. According to customs data, in 2024, the export value to the U.S. reached 121 million USD. Among this, the annual import of multifunctional, manual, and other household machines reached 1,113,070 units, valued at 30.82 million USD; industrial sewing machines totaled 62,627 units, valued at 19.13 million USD; embroidery machines reached 17,718 units, valued at 31.80 million USD; pre- and post-sewing equipment amounted to 461,847 units (sets), valued at 25.46 million USD; and parts amounted to 1.7 million kilograms, valued at 14.96 million USD.

Based on feedback from associations' research into industry machinery, embroidery machines, parts, foreign trade, and other related enterprises, the impact of tariffs has led to a near total suspension of direct sewing machinery exports to the U.S. Companies are now in a wait-and-see mode, awaiting further policies from the Chinese and U.S. governments. Some companies have indicated plans to explore re-export channels in South America and prioritize meeting the normal market demand. "Under the current tariff rates, normal exports are no longer viable; for now, we will wait and observe, as the new tariff framework, with upgrades to the origin rules and supply chain penetration checks, has greatly increased the compliance costs of label-based industrial transfer. Whether re-exporting is feasible still needs further observation."

According to Jinxuan Company, with years of experience in U.S. trade, the U.S. sewing machinery market share is mainly controlled by a few large distributors (companies), with the rest being small and scattered enterprises. After the tariffs, U.S. customers notified companies to delay shipments and imports, and some orders were directly canceled. "For now, all we can do is observe and wait, and we haven't found an effective solution."

SGGi's direct exports to the U.S. are relatively small, and the tariff impact is not significant. Moreover, due to global layout advantages, European tariff increases are lower, so companies like Dukopp and Baifu can still engage in direct trade. Jack, whose direct exports to the U.S. consist mainly of specialized equipment, has annual sales of around a few hundred thousand USD. This round of tariff conflict has not impacted Jack's sales and may even accelerate its expansion in the Central American market.

Looking at other companies, Zojee, Lejiang, Baoyu, Longtai, and others have minimal direct trade with the U.S. Major producers of machine needles, shuttle hooks, presser feet, needle plates, and tools have not directly participated in exports to the U.S., so they have not been impacted by the tariffs. "In the first quarter of this year, we already sent about 500,000 USD worth of goods to the U.S. The plan was to concentrate shipments in April to catch the sales peak in July, but after the tariffs were introduced, all shipments were paused."

To cope with the tariff impact, Feiyue officially raised the product prices on its self-operated store on the U.S. Amazon platform and encouraged other distributors to increase their sales on Amazon. "As the official flagship store, the price adjustment will directly benefit the sales of other country agents, such as in Europe, Mexico, and Argentina, on online platforms, helping to boost their sales." It is reported that Feiyue now has sufficient global orders, with stable orders in Europe and South America, and will focus on expanding its market in Southeast Asia and Central Asia.

"All the equipment we have prepared, after communicating with customers, can only be paused, and cannot be shipped out." Peimei Ke, which mainly produces small embroidery equipment like single-head machines for the European and American markets, has been directly impacted by tariffs. It is understood that the company will focus on participating in overseas exhibitions to explore new markets. Additionally, it will shift its sales focus to increase promotion in the domestic market.

Dazhu Yuming's direct export of laser cutting machines to the U.S. in 2024 amounted to nearly 10 million USD. Before the tariff changes, production and shipments were still normal in the first quarter. However, production of related orders has now been paused, and the equipment prepared for shipment has been temporarily shelved after communication with customers. Subsequent orders are also on hold. To mitigate the adverse effects, the company is expanding into South American and other regional markets through various channels.

"To Strike the Iron, One Must Be Strong," Focus on Doing One’s Own Work Well

Yang Xiaojing, Chairman of the China Sewing Machinery Association, pointed out that at the "Two Sessions" held at the end of March, the China Sewing Machinery Association precisely defined the theme of the meeting as “Optimizing Global Layout and Strengthening Competitive Advantages.” This theme aims to guide enterprises to adapt to trends, improve market concepts, adjust market strategies, diversify market approaches, vigorously expand both domestic and international markets, and push the industry’s development from being "large and comprehensive" to becoming "strong and resilient."

The current China-U.S. tariff conflict has had a profound impact on the industry and the entire industrial chain. In the face of the uncertainties and challenges posed by the situation, enterprises across the industry should focus on the following areas:

First, Raise the Position and Demonstrate Responsibility. The State Council issued a white paper on China’s stance regarding Sino-U.S. trade relations. On the policy level, the government has left room for adjustment of monetary policy tools, such as reserve requirement ratio cuts and interest rate reductions, which can be implemented when needed. The fiscal policy has clarified the need to increase expenditure and accelerate spending progress. Policies will be implemented to stimulate domestic consumption, and a series of reserve policies will be introduced in due course. These policy measures aim to stabilize the capital markets, boost market confidence, and maintain economic stability. Enterprises in the industry should align their development with the national agenda, resolutely support national decisions, respond to national calls, and assume their industry responsibilities.

Second, Strengthen Confidence and Prepare for Response. Data shows that in the first quarter of this year, China’s economy continued its recovery trend. In March, the core Consumer Price Index (CPI) showed a clear rebound, indicating that the effects of policies aimed at boosting consumption are becoming more evident. With the continued release of the vast market potential and the continuous implementation of policies to stabilize the economy and foreign trade, as well as with sufficient policy tools in reserve, China is fully capable of countering external unfavorable impacts and maintaining sustained and healthy economic growth. From the perspective of the Chinese sewing machinery industry, in 2024, exports to the U.S. are estimated at $122 million, accounting for just 3.57% of the industry’s total. The impact of several rounds of tariff friction between China and the U.S. on the industry has been limited and controllable. The industry can withstand the turbulence. For enterprises that are slightly more dependent on U.S. exports, such as those producing household sewing machines and single-head embroidery machines, early responses and proactive planning are necessary. These enterprises should diversify risks through methods such as re-exporting, private labeling, joint ventures, and product diversification to reduce reliance on the U.S. market.

Third, Innovation Drives New Quality and New Power. Domestic transformation and new productive forces create new capacity, but these efforts conflict with the export pressures caused by international trade frictions. Policies will address this conflict by optimizing the capacity structure, addressing the “involution” of competition, and promoting high-quality development in the manufacturing industry. Enterprises in the Chinese sewing machinery sector should further enhance their innovation-driven momentum. On one hand, they should continue product research and development and automation upgrades, accelerate implementation, and enhance technological value to assist the digital transformation of downstream industries, thereby strengthening the global competitiveness of "Chinese sewing machines." On the other hand, the entire industry should work together to accelerate its own digital transformation and the construction of a modern industrial system.

Fourth, Accelerate Global Market Expansion. Chinese sewing machinery enterprises have been accelerating the integrated development of domestic and international markets. They have established long-term, stable trade and service systems in over 200 countries and regions worldwide. In 2024, the industry’s exports are expected to reach $3.424 billion, an increase of 18.39% year-on-year. Exports to countries along the Belt and Road Initiative are expected to grow by nearly 27%, accounting for 70% of the industry’s total, showing strong demand potential and space for expansion.

In recent years, the Association has actively guided and encouraged industry enterprises to accelerate their "going global" efforts. It has organized special visits and research activities to regions and key markets in South America, Southeast Asia, the Middle East, etc., achieving significant results. In the future, the Association will continue to support enterprises in expanding their presence overseas and help create a new global market landscape.

Timeline for U.S.-China Tariff Changes in 2025:

• February 1, the U.S. government signed an executive order imposing a 10% tariff on all Chinese imports, effective from February 4. 
• February 4, China announced that it would officially impose a 10-15% tariff on certain U.S. products starting on February 10. 
• March 3, the U.S. raised the additional tariffs on Chinese mainland goods from 10% to 20%. On March 4, China announced that it would impose a 10-15% tariff on certain U.S. products starting 
• March 10. On March 12, U.S. tariff measures officially took effect, imposing a 25% tariff on all steel and aluminum imports into the U.S. 
• April 2, the U.S. announced that starting April 5, it would impose a "universal" 10% tariff on goods from 185 countries worldwide. Starting April 9, it would impose additional tariffs ranging from 20% to 49% on over 180 countries and regions, with China’s corresponding tariff rate set at 34%. 
• April 4, China announced that starting April 12, it would impose a 34% tariff on imports from the U.S. On April 8, the U.S. imposed an 84% tariff on Chinese goods. 
• April 9, China imposed an 84% tariff on U.S. goods. 
• April 10, the U.S. raised the reciprocal tariff on Chinese goods to 125% (with the actual total tariff rate at 145%) and suspended the "reciprocal tariffs" for countries that had not imposed retaliatory tariffs on the U.S. for 90 days, reducing the tariff rate to 10%. 
• April 11, China raised its tariff on U.S. goods to 125%. On April 16, the U.S. announced an additional 245% tariff on certain Chinese products. 
• April 18, U.S. Customs announced that starting May 2, it would remove the small exemption on goods originating from Mainland China and Hong Kong, including international postal parcels sent to the U.S. through the international postal network.