On November 5, the highly anticipated 2020 U.S. presidential election still has not come to an end.
This 2020 US presidential election can be said to have twists and turns: before the election, almost all US polling agencies Everyone believed that Biden would win the final election, and his support rate was more than 10 percentage points higher than Trump; during the election, Trump had an advantage in most of the swing states, and it was once thought that he had a chance to win; In the final stage of counting, after the mail-in ballots were counted, Biden reversed the election in Michigan and Wisconsin, and Trump filed a lawsuit…
The US election has changed from a “movie” to a “TV series”, which has made people like the editor full of food. But no matter what, as the world’s largest economy and consumer market, and the leader of the Western capitalist world, the United States’ continued political turmoil will inevitably have a major impact on the global market, thereby affecting the textile industry.
1. Huge earthquake in the financial capital market
Because before the election results were announced, due to the influence of polls, the market was generally optimistic about Biden’s election, so financial capital was also making arrangements in this area. Although Biden now has a great advantage, Trump seems to have Not wanting to admit the result, a lawsuit was filed.
The capital market also experienced frequent changes as a result. The Nasdaq futures index once rose above 4% on the morning of November 4, and even triggered a circuit breaker, suspending trading for two minutes. On November 5, U.S. stocks opened higher across the board, with the Nasdaq 100 index once rising by more than 4%. Gold surged 20 points, and U.S. bond yields fell from highs. International oil prices continue to oscillate. After falling in early trading yesterday, they began to rise. In the early morning of November 5, U.S. and Burundi oil futures both rose by more than 4%, but this was just the beginning.
Judging from the situation after the 2016 election, after Trump was elected, there was a wave of boycotts against Trump in the United States, which showed the divisions in American society. crack. After the cumulative number of confirmed cases of COVID-19 in 2020 approached 10 million, this social division became more serious. On the day of voting, conflicts broke out between voters on both sides at the polling stations. Now that the election situation continues to be stalemate, in the future, the capital market may experience continuous turmoil for a period of time, and large rises and falls may become the norm, and this turmoil will also affect crude oil, PTA, ethylene glycol, etc. The price of bulk commodities radiates to the price of polyester raw materials, and ultimately radiates to the textile industry.
2. The continuation of US unilateralist policy
After four years of Trump’s term, Trump’s attitude towards China and even all countries other than the United States has become very obvious. Although “bringing manufacturing back to the United States and making America great again” is impossible from an objective economic perspective, it is indeed what Trump voters expect of him. If Trump is re-elected, there is a high probability that some of his original unilateralist policies will continue in order to maintain his image.
On the other hand, if Biden takes office, although U.S. presidents have always had a tradition of “opposing their predecessors,” targeting China has always been the consensus of both parties in the United States, so there may be an open meeting In the future, some tariffs will be lifted, but it may be used to suppress China’s manufacturing exports in disguise by restarting the TPP agreement. Although it will not be as direct as Trump’s, the impact will be equally huge.
So in any case, it is very difficult for textile companies to restore the “golden time” of Sino-US trade friction. However, after experiencing export restrictions in recent years, textile people may also I have gotten used to it, so this may not be good news at all.
3. The epidemic is difficult to control in the short term
When it comes to affecting the textile market, the control of the epidemic must be mentioned. Recently, there has been a lot of news that Europe has re-closed cities due to the second outbreak of the epidemic, resulting in the cancellation of some export orders.
Even though the Sino-US trade friction has lasted for more than two years, China’s textile and apparel exports to the United States still totaled US$45.21 billion in 2019, and this does not include exports of fabrics and accessories to Southeast Asian countries The amount of garment processing is then carried out by Southeast Asian countries. Therefore, no matter what, if the epidemic in the United States can be controlled, it will be a good thing for China’s textile foreign trade exports.
But everyone has seen Trump’s final anti-epidemic results. If it were Biden, it would be almost impossible to see it among the people at this stage.The trend is to bring the epidemic under control before vaccination.
But the good news is that the time for large-scale vaccine rollout is getting closer and closer, which can be regarded as a blessing among misfortunes.
What should textile people do
Actually, when it comes to things like the US election, the editor recommends that you just watch it with a can-do mentality. Although the two sides are currently fighting a bloody battle, no matter how the outcome develops, Trump will stay on the throne of the US president at least until next year, so the US foreign trade policy towards China will continue in the short term.
On the other hand, there is a high probability that the financial capital market will undergo huge changes in the near future, such as international oil prices and the exchange rate of RMB against the US dollar, which are closely related to the production and operation of textile enterprises. Big-impact macro data may also experience significant fluctuations.
For textile companies, the most important thing is to seek stability during the epidemic. They will take orders that they can take, and don’t force them if they can’t. Especially for foreign trade orders at this stage, you must be careful when accepting them. It is best to leave a certain margin of profit for yourself. Don’t end up “working hard for more than half a month and still losing money in the final calculation”.
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