Recently, news that a 20-year-old textile manufacturer is about to close has drawn attention in foreign trade circles. Coincidentally, while some export manufacturers are adjusting overseas capacity, new signals have emerged on China-US tariff policy. The two sides are advancing reciprocal tariff reductions of about $30 billion each, though the specific product lists have not been published. One is the orderly exit of a 20-year foreign trade factory; the other is a fresh easing signal in China-US tariffs. Together, they make the ongoing shift in foreign trade supply chains more visible.

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Kanglong Textile moves toward closure; US firm exits China production

In early September, Jiaxing was still hot. Inside Kanglong Textile’s plant, production areas had been marked with “closed” warning signs, while the US-based manager said goodbye to workers via video link.

Public records show Kanglong Textile was founded in 2005, mainly producing denim and related fabrics. It was once large-scale and the only China production base of Cone Denim, a veteran US denim fabric giant. All its products were sold to the US, and its workforce exceeded 1,000 at its peak.

According to industry media, the company is now advancing employee placement, with some employees handled on an “N+1” basis. However, such compensation details mainly come from media reports, not official disclosures by Kanglong Textile.

What confirms the background of the closure is a strategic adjustment statement issued by Cone Denim on September 3.

 Cone Denim announced it will exit denim production in China by the end of 2026, while further strengthening its manufacturing platform in Mexico. The company explained that the decision was made after reassessing the global denim market, manufacturing footprint, customer sourcing needs and long-term strategy. Factors include changes in the global trade environment, customer sourcing strategies, cost pressure, supply chains and geopolitics.

In other words, Kanglong Textile’s closure is not simply a Chinese factory suddenly losing orders; it reflects a broader change in production layout.

According to the announcement, Cone Denim has clearly designated Mexico as its subsequent denim manufacturing platform. It said Mexico’s existing production system will take over future manufacturing and continue serving global customers.

This is a typical shift in export manufacturing in recent years.

In the past, Chinese factories won global orders with complete supply chains, mature production systems and cost advantages, especially in apparel, textiles and home goods. But with US tariffs, supply chain adjustments and changing customer sourcing locations, some manufacturing capacity originally aimed directly at the US market has been relocated.

Notably, this does not mean “Made in China is losing all overseas orders.”

While Kanglong Textile is closing, some companies that previously moved production out of China because of tariffs and supply chain diversification have recently reassessed and started returning. Reuters reported on September 14 that some firms found overseas supply chains could not fully replicate China’s mature industrial support and began reconsidering increased production in China.

 Therefore, the real change in manufacturing is not simply “orders leaving China,” but companies placing more weight on the balance among tariff costs, supply chain efficiency, customer market distance and capacity layout.

Kanglong Textile’s closure is more like one concrete case in this round of supply chain reconfiguration.

02

China and US plan $30 billion tariff cuts; textiles and apparel may draw attention

As export manufacturers continue adjusting supply chains, new signals have emerged in China-US tariff policy.

On July 23, China’s Ministry of Commerce said the two sides’ economic and trade teams were communicating on the structure, functions and operating model of a trade council, and discussing reciprocal tariff reduction frameworks of about $30 billion each. China also said it was seeking opinions from enterprises and business associations on relevant tariff reduction proposals.

By September 10, progress on this arrangement was reported again.

A Ministry of Commerce spokesperson said the two sides are working to implement reciprocal tariff reductions as soon as possible, covering about $30 billion in goods each. US Trade Representative Greer has publicly given a more specific timeline, saying he hopes to announce some results around September 24.

According to public information, the discussions cover non-strategic, non-sensitive goods. Some media reports say the most mentioned items on the US tariff reduction list are home appliances, household goods, textiles, apparel, footwear, hats, toys, some consumer electronics accessories, food and low-end industrial products—exactly the hot categories for cross-border e-commerce.

This clearly sends a noteworthy signal to Chinese foreign trade enterprises.

For industries that have long depended on the US consumer market—such as apparel, textiles, home goods and footwear—lower extra tariffs on some products could, in theory, ease cost pressure for some exporters and US importers.

Some research reports estimate that if Section 301 tariffs return to most-favored-nation rates, related companies could reduce tariff costs by 7.5 to 25 percentage points.

But whether tariff cuts turn into orders depends on the final rates after products enter the list, US market demand and how buyers ultimately allocate costs.

Trade policy can change at any time, but one trend is increasingly clear: single-market “dividends” are ultimately less reliable than a diversified market “base.” Tariff cuts open a channel, but how far that channel goes depends on whether you have your own supply, your own channels and your own pricing power. What sellers should really do is use this window to diversify—build out channels and supply chains, and raise brand visibility.

What truly withstands cycles is never the one that squeezes costs to the minimum, but the one that holds bargaining power, controls its own customers and achieves a diversified market layout.

By Cifnews  

(Source: Cifnews editorial team)

Seller’s Home commentary

The tariff-cut benefits cannot hide supply chain restructuring. Kanglong’s closure confirms the trend of production relocation. Sellers should seize the tariff-cut window to optimize costs, while also evaluating alternative nearshoring opportunities such as Mexico.

Source: Cifnews
Original link: https://www.cifnews.com/article/188873