The US-China tariff cut makes Chinese gloves cheaper and more competitive, posing a threat to Malaysian glove manufacturers amid rising global supply and uncertain trade policies.
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00:00The U.S.-China tariff deal is seen as negative for Malaysian glove makers as it makes Chinese gloves cheaper and more competitive, potentially hurting demand for local products.
00:11Starting Wednesday, May 14th, the U.S. will cut tariffs on Chinese imports from 145% to 30% for 90 days, while China will lower tariffs on U.S. goods from 125% to 10%, according to a joint statement.
00:26According to DH, report analysts are unsure of the exact tariff rate on gloves given the existing 50% U.S. tariff effective January 1st, 2025, and a planned increase to 100% in 2026.
00:41However, they agree the cheaper Chinese gloves will hurt local glove makers.
00:46Hong Leong Investment Bank expects Chinese neutral gloves to face an 80% U.S. tariff, which includes 50% existing, plus 30% 90-day rate.
00:57It said although these gloves are still costly, cheaper Chinese vinyl gloves may negatively impact Malaysian glove makers.
01:04By its calculations, the tariff cut lowers the landed price of Chinese neutral gloves in the U.S. from $44.25 to $27 per 1,000 pieces, still more costly than Malaysian and Thai gloves at $17.60 to $18.70.
01:22Vanille gloves benefit more, with prices falling from $22 to $24.50 to $11.70 to $13, making them cheaper than Malaysian natural gloves.
01:36It said since Chinese vinyl gloves already dominate 70% to 75% of the U.S. market and are now cheaper, buyers may prefer them, reducing the demand shift to nitrile gloves, a setback for Malaysian producers.
01:49HLIB sees hope for Malaysian glove makers if U.S. buyers switch from vinyls to nitrile gloves, especially if U.S.-China tariff talks fail.
01:59Nitrile gloves are higher quality, and this shift could help restore supply-demand balance by 2026.
02:06Meanwhile, Maybank Investment Bank Maybank IB said U.S. tariffs on Chinese gloves remain unclear, possibly 80%, but could be just 50%.
02:15Malaysian gloves face a 10% U.S. tariff until July 8, 2025, then 24% after.
02:23The firm warned that tariff uncertainty may lead buyers to delay orders.
02:27More importantly, new Chinese glove production in Southeast Asia from 2026 could increase supply, putting pressure on prices and sales.
02:37S&P Securities, expecting an 80% tariff on Chinese gloves, kept a neutral outlook on the glove sector due to a weak short-term outlook and ongoing uncertainties like the trade policy changes and Chinese expansion.
02:51It said stock prices already reflect a gradual earnings recovery expected in late 2025.
02:56S&P Securities said since U.S. raised tariffs on Chinese gloves in the late 2024, Chinese producers have shifted to non-U.S. markets like Europe, increasing competition and lowering prices there by 10% to 20%.
03:12Due to uncertainty, buyers are spreading orders among different suppliers.
03:16U.S. buyers are delaying purchases, resulting in weaker demand and lower sales for Malaysian glove makers, likely lasting until mid-2025.
03:26U.S. reported to be announced in pulses.
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