The impact of increased tariffs on Chinese spunlace nonwovens and wet wipes exports |CCFGroup (2025)

Since the beginning of this year, the U.S. government has imposed two additional rounds of tariffs on Chinese goods, with each round starting on Feb 4 and Mar 4 respectively, at a rate of 10% (totaling a 20% increase). Since the initial imposition of tariffs on certain Chinese goods in 2018, the highest tariff on some products has reached 45%. However, some products have been granted exemptions during this period. On May 23, 2024, the U.S. Trade Representative (USTR) announced an extension of certain exclusions under Section 301 tariffs on Chinese goods, which included spunlace non-woven fabric and wet wipes, lasting until May 31, 2025. However, no documents have been released regarding exemptions for the latest two rounds of tariffs imposed this year.

Spunlace non-woven fabric is exported to the vast majority of countries worldwide (183 countries or regions involved in 2024). However, the export volume is relatively concentrated, with the top eight countries or regions accounting for 60%-70% of the total. The most significant markets are the U.S., Japan, and South Korea, which together take up nearly 50%, with the U.S. representing less than 10% (over 10% in 2020-2021). In recent years, the volume exported to the U.S. has been steadily increasing. Therefore, while the overall impact of U.S. tariff increases may not be too significant, it places considerable pressure on fabric manufacturers that heavily relies on the U.S. market.

Most exports to the U.S. come from enterprises in Zhejiang province, which occupied over 70% in 2022-2024.

The impact of increased tariffs on spunlace non-woven fabric may not be substantial, but it significantly affects wet wipes. Data related to wet wipes falls under H.S. code 34011990, which is expected to include some non-wet wipe products. Thus, the following data and charts should be referenced accordingly. The largest export destination for wet wipes is the U.S., which has accounted for less than 30% in recent years (peaking at nearly 50% in 2020). Consequently, the U.S. tariff increases have a considerable impact on the wet wipe industry's exports, testing the cooperative relationship between Chinese and American companies, as well as necessitating a repricing strategy for Chinese enterprises.

Similar to spunlace non-woven fabric, the primary exporters to the U.S. are also from Zhejiang, with the proportion steadily increasing in recent years, reaching 62% in 2024.

The U.S. has imposed tariffs on Chinese spunlace nonwovens and wet wipes, Chinese companies have expressed some concerns, particularly those in the wet wipes sector. However, China is a major supplier of spunlace nonwovens and wet wipes globally, making it difficult for the U.S. to find alternative suppliers in the short term. According to data from the United Nations Department of Economic and Social Affairs, China's share of exports to the U.S. for spunlace nonwovens (under category 560392) and wet wipes (under category 340119) exceeds 50%. Additionally, if the U.S. imports more spunlace nonwovens and wet wipes from other countries, it may lead to supply shortages in those countries, resulting in higher prices in the short term.

Currently, both Chinese and American companies are renegotiating pricing. Given the industry's low profitability and high competition, Chinese companies find it challenging to absorb excessive tariffs, and it is expected that the burden will primarily fall on the U.S. itself. According to feedback from some companies, exports have still performed reasonably well since the tariffs were imposed earlier this year.