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Taiwanese township shocked by order for 600 million socks as Trump tariffs kick in

Taiwan reaps benefits from US-China trade war with order of 300 million pairs of socks for companies in Changhua

LOHO Hosiery Museum. (Taiwan Tourism Bureau photo)

LOHO Hosiery Museum. (Taiwan Tourism Bureau photo)

TAIPEI (Taiwan News) -- A small township in western Taiwan has suddenly found itself flooded with an order for 600 million socks after U.S. President Trump announced that he was raising tariffs on a broad spectrum of consumer products from China earlier this month.

On May 14, Trump announced that he would raise tariffs on US$200 billion worth of goods made in China from 10 percent to 25 percent. The list of items covered by the tariffs included everything from agricultural and livestock products to clothing, household goods, mobile phones, and laptops, causing chaos in the global supply chain.

Although the tariff list is yet to be finalized until the end of the month, many major shoe brands which sell to the U.S. market such as Nike and Adidas issued an open letter to Trump warning that increased costs would be passed on to consumers because 70 percent of shoes imported into the U.S. come from China.

Behind the scenes, however, bills of lading have started to flood into other countries, including Taiwan. Just a week after Trump announced the new tariffs, an order was placed for 300 million pairs of socks for manufacturers in the tiny township of Shetou in Changhua County, reported CommonWealth Magazine.

The township of Shetou, with a population of only 40,000, is so well known for its sock factories that a local saying goes, "There are three things in abundance in Shetou: guavas, socks, and chairmen." In its heyday, the township churned out tens of billions of Taiwan dollars worth of socks.

However, in recent years, a free trade agreement between the U.S. and South Korea and competition from China started to squeeze out local manufacturers. Fortunately, it appears that the intensifying trade war between the U.S. and China is giving sockmakers in Shetou a new lease on life.

Wei Ping-i (魏平儀), chairman of the Taiwan Hosiery Manufacturers' Association, told CommonWealth Magazine that he received an order from a trading company last week asking for 300 million pairs of socks for the U.S. market, which had originally been meant for producers in China. The customer is desperately looking for manufacturers outside of China and Taiwan is one the countries they are looking to now, said Wei.

Although the details and terms of the bill of lading have yet to be finalized, Wei excitedly told the magazine, "Although Taiwan may no longer be the cheapest, it still has strong production and distribution capabilities. The 300 million socks can be entirely eaten [produced] by Taiwan." Wei added that because none of his association members have investments in China, they are actually able to benefit from the U.S.-China trade war.

It is because of the special ecosystem of its tight-knit community that Shetou has been able to achieve outstanding export results in the past. Big factories such as QueenTex (琨蒂絲) run by Wei will contract to other small satellite plants, which may be so small that they only have one or two looms and the owner is also the sole employee.