Trump's China Tariffs Helping Pakistani Garments Exports to America

[RiazHaq]

http://www.riazhaq.com/2019/06/trumps-china-tariffs-helping-pakistani.html

Pakistan's garments exports to the United States have jumped 12% in first quarter of 2019 from the same period a year ago, according to USITC Dataweb. This double digit exports growth is being partly attributed to US President Donald's Trump ongoing trade war with China with the US government imposing 10% to 25% tariffs on certain Chinese goods. Pakistani rupee devaluation has also contributed to the nation's overall competitiveness.


Textile Exports to United States. Source: Bloomberg

American buyers are diversifying their supplier base away from China, the No. 1 exporter of these goods to the U.S. Already, Bangladesh is close to snatching the trousers-to-towel crown, according to Bloomberg News. Pakistan, at No. 6 last year, has grown its own shipments to the U.S. by almost 12% this year. It may overtake India, which has seen virtually no improvement.


Pakistan's Real Effective Exchange Rate (REER). Source: Bloomberg

Pakistani apparel exports are becoming more competitive in international markets because Pakistani rupee has declined by almost 25% recently. This has wiped out the currency’s overvaluation adjusted for inflation differences with trading partners, as estimated by the IMF.

Textiles industry is just one the export industries seeing exodus of manufactures and buyers from China. Electronics industry is seeing similar moves. Engadget is reporting that Google is moving production of its US-bound Nest thermostats and motherboards to Taiwan. The Wall Street Journal has reported that Nintendo is shifting at least some production of its Switch console to Southeast Asia.

Last November, Nomura Securities strategists had said they expected Malaysia, Japan and Pakistan to be the top 3 beneficiaries of import substitution triggered by US-China trade war escalation. Nomura's analysis is based on detailed study of 7,705 items which will be subject to tariffs and counter tariffs by US and China if the stand-off continues. Nomura developed two indices as part of its research on the subject: NISI (Nomura Import Substitution Index) and NPRI (Nomura Production Relocation Index).

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http://www.riazhaq.com/2019/06/trumps-china-tariffs-helping-pakistani.html

 

[FuturePAF]

Pakistan need to send its trade delegations to all the major textile companies, and show them how competitive Pakistan is now. Pakistan needs to go market to these companies to win back market share.

While the duration of the trade war can not be known, once a company has invested in Pakistan, it will only leave if it makes financial sense to do so. China to is try to move up the value added chain, and so Pakistan can try to restrict export of its high quality raw materials like cotton to competitors like Vietnam and line up foreign brands to partner with Pakistan.

Pakistan needs to move fast, before India makes a similar play for market share.

BTW, good job to the textile manufacturers for double digit growth.

 

[atan651]

Don't tell trump if and when Pakistan runs a trade surplus with the US. He'll come after you!

 

[Yaseen1]

we should increase price and not sell at cheap prices

 

[RiazHaq]

Don't tell trump if and when Pakistan runs a trade surplus with the US. He'll come after you!

Pakistan already runs a trade surplus with US.

• The U.S. goods trade deficit with Pakistan was $783 million in 2018, a 2.2% increase ($17 million) over 2017.

https://ustr.gov/countries-regions/south-central-asia/pakistan

 

[RiazHaq]

US #Trade with #Pakistan reached record high of $6.6 billion in 2018 , Asst Sec of State Wells tells Congress. Pakistan runs trade surplus of $782 million with the #UnitedStates - Newspaper - http://DAWN.COM

https://www.dawn.com/news/1488126

The Trump administration has informed Congress that trade between the United States and Pakistan reached an all-time high in 2018, as Washington endorsed Islamabad’s budget re-emphasis on a relationship built on trade, not aid.

Alice G. Wells, Senior State Department Official for South and Central Asian Affairs underlined this change in a written statement to the House Foreign Affairs Subcommittee for Asia, the Pacific and Nonproliferation. On Thursday, the panel began a hearing on the State Department’s 2020 budget requests for the South and Central Asian regions.

Ms Wells informed the lawmakers that in 2018, US-Pakistan bilateral trade reached an all-time high, exceeding $6.6 billion.

US exports to Pakistan rose 4pc to $2.9bn, also an all-time high, and the trade deficit sunk to 2pct, or $782 million. “Trade in agriculture was a particularly bright spot,” she said. US soybean exports went from $0 in 2014 to $689 million in 2018.

She noted that Pakistan was a market of more than 200 million people, including a growing middle class, and that’s why it “provides ample opportunities for US trade and investment to grow further.”

According to the US Trade Representative’s office in Washington, Pakistan is currently America’s 56th largest trading partner during 2018. US exports totalled $2.9bn while imports from Pakistan totalled $3.7bn. The US goods trade deficit with Pakistan was $783 million in 2018.

The top US export categories in 2018 were: miscellaneous grain, seeds, fruits ($694m), cotton ($615m), iron and steel ($225m), machinery ($211m), and optical and medical instruments ($117m).

US exports of agricultural products to Pakistan totalled $1.5bn in 2018, making the country the 19th largest agricultural export market. Leading domestic export categories include: soybeans ($689m), cotton ($615m), tree nuts ($49m), dairy products ($38m), and planting seeds ($37m).

Pakistan was America’s 58th largest supplier of goods imports in 2018.

US total imports of agricultural products from Pakistan totalled $126m in 2018. Leading categories include: rice ($31m), sugars, sweeteners, beverage bases ($30m), spices ($19m), processed fruit & vegetables ($9m), and snack foods ($7m).

The top import categories in 2018 were: miscellaneous textile articles ($1.3bn), knit apparel ($809m), woven apparel ($586m), leather products ($121m), and cotton ($112m). US foreign direct investment (FDI) in Pakistan (stock) was $518m in 2017, a 25.7pc increase from 2016.

 

[rishav]

But the dollar revenue remains stagnant . Clearly because of the huge devaluation

 

[RiazHaq]

But the dollar revenue remains stagnant . Clearly because of the huge devaluation

The dollar value for exports to US is not stagnant. It's up 11.8% for garments exports.

 

[rishav]

The dollar value for exports to US is not stagnant. It's up 11.8% for garments exports.

Coz i saw it in new

Pakistan’s textile exports stagnant; RMG marks 3.2% growth
https://apparelresources.com/busine...extile-exports-stagnant-rmg-marks-3-2-growth/

Are you sure that 11.8% is growth in quantity or in dollar terms ?

 

[Kaniska]

http://www.riazhaq.com/2019/06/trumps-china-tariffs-helping-pakistani.html

Pakistan's garments exports to the United States have jumped 12% in first quarter of 2019 from the same period a year ago, according to USITC Dataweb. This double digit exports growth is being partly attributed to US President Donald's Trump ongoing trade war with China with the US government imposing 10% to 25% tariffs on certain Chinese goods. Pakistani rupee devaluation has also contributed to the nation's overall competitiveness.


Textile Exports to United States. Source: Bloomberg

American buyers are diversifying their supplier base away from China, the No. 1 exporter of these goods to the U.S. Already, Bangladesh is close to snatching the trousers-to-towel crown, according to Bloomberg News. Pakistan, at No. 6 last year, has grown its own shipments to the U.S. by almost 12% this year. It may overtake India, which has seen virtually no improvement.


Pakistan's Real Effective Exchange Rate (REER). Source: Bloomberg

Pakistani apparel exports are becoming more competitive in international markets because Pakistani rupee has declined by almost 25% recently. This has wiped out the currency’s overvaluation adjusted for inflation differences with trading partners, as estimated by the IMF.

Textiles industry is just one the export industries seeing exodus of manufactures and buyers from China. Electronics industry is seeing similar moves. Engadget is reporting that Google is moving production of its US-bound Nest thermostats and motherboards to Taiwan. The Wall Street Journal has reported that Nintendo is shifting at least some production of its Switch console to Southeast Asia.

Last November, Nomura Securities strategists had said they expected Malaysia, Japan and Pakistan to be the top 3 beneficiaries of import substitution triggered by US-China trade war escalation. Nomura's analysis is based on detailed study of 7,705 items which will be subject to tariffs and counter tariffs by US and China if the stand-off continues. Nomura developed two indices as part of its research on the subject: NISI (Nomura Import Substitution Index) and NPRI (Nomura Production Relocation Index).

Related Links:

Haq's Musings

South Asia Investor Review

Can Pakistan Avoid Recurring Balance of Payment Crisis?

Pakistan Economy Hobbled By Underinvestment

Pakistan's IT Exports Surging

Can Indian Economy Survive Without Western Capital Inflows?

Pakistan-China-Russia Vs India-Japan-US

Chinese Yuan to Replace US $ as Reserve Currency?

Remittances From Overseas Pakistanis

Can Imran Khan Lead Pakistan to the Next Level?

China to Expand Manufacturing in Special Economic Zones

http://www.riazhaq.com/2019/06/trumps-china-tariffs-helping-pakistani.html

That is expected...In the current time, nonone produce quality goods in cheaper price than China...Unless China rise to developed nation where all people are developed, economically China is competetor all developing economies...

 

[RiazHaq]

Coz i saw it in new

Pakistan’s textile exports stagnant; RMG marks 3.2% growth
https://apparelresources.com/busine...extile-exports-stagnant-rmg-marks-3-2-growth/

Are you sure that 11.8% is growth in quantity or in dollar terms ?

Look at US International Trade data in my post. It's up 11.8% in US$.

The story you're referring to is about Pakistan's TOTAL RMG exports to ALL countries being up 3.2%.

 

[bête noire]

Good to see both BD and PK doing well. BD will probably and quite easily overtake China to be the top exporter in this specific area by next year.