NCTO and Applied DNA Sciences Featured in Wall Street Journal Video on Banned Chinese Cotton Continuing to Flow into the U.S. Market

The Wall Street Journal posed a critical question in a new video out on “Why Banned Cotton From China is So Hard to Keep Out of the U.S.”

The video, which is posted on the Wall Street Journal’s website here, features NCTO President and CEO Kim Glas and NCTO member, Applied DNA Sciences President and CEO James Hayward.

It traces the Chinese cotton supply chain, which is under fire globally for utilizing illegal forced labor, and highlights how contradictory government policies and insufficient enforcement have failed to prevent cotton apparel made with forced labor in Xinjiang, China from entering the U.S. market.

There is no doubt that the cotton apparel made with forced labor in Xinjiang, China and imported to the U.S. is severely impacting the competitiveness of the U.S. textile industry. 

In fact, the low level of enforcement by Customs and Border Protection (CBP) is extremely concerning, given that legislation known as the Uyghur Forced Labor Prevention Act (UFLPA), which bans the importation of imported products made by forced labor, was implemented 14 months ago.

At the same time, nearly 3 million shipments per day come into this country under the Section 321 de minimis mechanism, largely uninspected and duty free, which gives China another backdoor to our market and rewards their predatory trade practices.

NCTO is calling for stepped up enforcement of the UFLPA and closure of the “de minimis” loophole, which facilitates this trade and gives China duty-free backdoor access to the U.S. market.

In the video, the Wall Street Journal “unpacks the complexity of the supply chain to explain why experts believe much of the cotton is still making its way to the U.S.”

NCTO Amplifying the Policy Issues Impacting the Industry

On the communications and press front, NCTO President and CEO Kim Glas penned two important and insightful op-eds, outlining how Section 301 tariffs and the U.S.-Dominic Republic (CAFTA-DR) agreement are helping the U.S. textile industry, a key American manufacturing sector, compete.

In the first piece, Kim wrote a joint op-ed with CECATEC-RD Executive Director Patricia Figueroa that showcases perspectives from both the U.S. and Central American textile and apparel industries on the state of nearshoring in Central America and focuses on the region and our co-production chain as a strong sourcing alternative to Asia, even in a down market.

Read the op-ed here: Why Central Ameria Makes Sense–Even in a Down Market

The second opinion piece, titled “Keep China in Check: Don’t let Section 301 Tariffs Expire,” published by The Hill, outlines how the Section 301 tariffs on finished apparel and textile products has created a more level playing field against unfair trade practices, such as forced labor in China.

It is a timely opinion piece, in light of the U.S. Trade Representative Office’s pending four-year review and decision that will weigh heavily on the U.S. textile industry.

Please see a link to the op-ed on The Hill’s website here: Keep China in check: Don’t let Section 301 tariffs expire.


Wilson College of Textiles Receives $2M in USAID Funding

North Carolina State University’s Wilson College of Textile has received $2 million in funding to establish a technical textile training program in Honduras, which comes at a pivotal time of onshoring and nearshoring for the textile and apparel industry.

The United States Agency for International Development (USAID) awarded the $2 million, two-year grant to Wilson College to develop the new program in partnership with Gaston College and Catawba Valley Community College—all nationally recognized for their leadership in textiles innovation, research and education—and the Universidad Tecnológica Centroamericana (UNITEC), a leader in providing technical and engineering education in Honduras.

As outlined in press release and post from Wilson College, the program is titled Hilando Oportunidades (Spinning Opportunities) in northern Honduras and aims to  deliver training to at least 1,500 Hondurans in yarn spinning, knitting, dyeing and finishing, and apparel production. The project will be led by Melissa Sharp, associate director of Zeis Textiles Extension (ZTE) in Wilson College, who says “a key aspect of the program is the development of trackable credentials that will empower workers in Honduras’ textile industry and expand the routes to advancement.”

In addition, education technology partner Shimmy, an industrial startup, will provide training through mobile applications while credentials will be issued through Credly and maintained by NC State, providing third-party evidence of skills and training attained through Hilando Oportunidades.

The announcement of funding and the universities’ partnership followed an MOU signing in August 2022, which brought together high-level U.S. and Honduran government officials, including: Jose W. Fernandez, Under Secretary of State for Economic Growth, Energy and the Envirnonent; Jennifer Knight, Deputy Assistant Secretary for Textiles, Consumer Goods and Materials at the U.S. Department of Commerce; and Hector Zelaya, private secretary to Honduran President Xiomara Castro.

The U.S. State Department issued a statement of public support for the MOU at the time and the unique collaboration between the U.S. and Honduran institutions.

The partnership comes at a defining moment for the U.S., Honduras and Central America, which are seeing significant levels of investment in textile and apparel production as part of a co-production chain under the U.S.-Dominican Republic-Central America (CAFTA-DR) agreement.

NCTO President and CEO Kim Glas and CECATEC-RD Executive Director Patricia Figueroa recently penned a joint op-ed that showcases perspectives from both the U.S. and Central American textile and apparel industries on the state of nearshoring in Central America and focuses on the region and our co-production chain as a strong sourcing alternative to Asia, even in a down market.

In the past 18 months alone, this vibrant partnership with the region has spawned $2 billion in investments in both the U.S. and Central America, as brands and retailers continue to look for ways to diversify their supply chains.

The U.S. and this region are inextricably linked through a textile and apparel co-production chain that generated $15 billion in annual two-way trade in the sector and supports 1 million workers in the U.S. and region.

That is why this partnership and the Hilando Oportunidades training and education program in Honduras is critical, to help prepare thousands of students for the next generation textile workforce.

It is intended to create an educational pathway to economic opportunity in Honduras and the region that not only creates a skilled and resilient workforce but can also help address the root causes of irregular migration.

Current growth projections indicate a need for more than 10,000 skilled new workers in the textile industry in Honduras alone over the next five years. In order to meet these needs, educational programming is needed at all levels.

North Carolina plays a central role in this co-production chain. It is the second-largest state for textile employment nationally with over 36,000 workers, and the state’s $2.7 billion in textile-related exports leads the nation. The Northern Triangle, including Honduras, is a major export destination for U.S. yarns and fabrics that come back as finished items under the CAFTA-DR trade agreement.


Textile Execs Discuss Nearshoring Trends, Policies to Bolster the U.S. Textile Industry’s Competitiveness

NCTO President and CEO Kim Glas joined David Smith, Executive Vice President of Milliken & Company’s Textile Division and Bob Antoshak, partner at Gherzi Textile Organization, in a timely panel discussion on the trends driving nearshoring and onshoring of textile and apparel production last month.

The panel discussion, titled the “ABC’s of Nearshoring,” was held at Texworld in New York City on July 19.

The dynamic discussion touched on several key trade issues impacting the industry, including the yarn forward rule of origin in CAFTA-DR and USMCA, Section 301 tariffs and the Section 321 de minimis loophole. It also highlighted the significant investment—$2 billion in the CAFTA region in the past 18 months—and how companies can capitalize on moving production close to home.

In her opening remarks, NCTO’s Kim Glas pointed to several trends showcasing that nearshoring continues to build momentum, though apparel and textile trade is currently in a slump globally.

“It’s here to stay and it’s going to grow in the future,” Glas said, pointing to the $2 billion in new investment in both the U.S. and Central America, “as brands and retailers continue to look at ways to diversify their supply chains.”

Glas also said 2022 was a banner year for two-way textile and apparel trade with Central America, which hit $15 billion. Notably, 81 percent of U.S. exports of spun yarns go to the CAFTA-DR countries.

That is why she said she is “bullish on the future,” despite the recent dip in trade. She said the co-production chain employing more than 1.1 million workers collectively is predicated on the yarn forward rule of origin in free trade agreements such as CAFTA-DR.

Rules of origin help drive investment in yarn and fabric production. COVID created a shift in many people’s minds and drove companies to recalibrate their supply chains to diversify out of China and move production closer to market, she added.

Milliken’s David Smith stressed that the region has the capacity and capability to meet brands’ and retailers’ needs.

“Chances are the U.S. and the regional textile industry has the capabilities and the capacity to meet your needs. And if there are any gaps, I think you’ll find a listening ear and a willingness to work with you to eliminate those voids,” as reported by Sourcing Journal. “The industry is investing and growing the perception that we have limited yarn capacity or weaving capacity in the region. And when I say in the region, I’m including in the U.S.”

And he noted that just doubling apparel and textile exports from Central America, which has a U.S. import market share below 10 percent, would translate into $6 billion in investment and generate 187,000 new textile and apparel jobs in the U.S. and 2.2 million jobs in Central America.

“All we are looking for is a willing partner,” Smith said.



NCTO Executive Fly-In Highlights Critical Trade Issues & Industry’s Competitiveness

NCTO executives participated in an important Washington fly-in last month, and met with some of the most powerful members of Congress and the nation’s top trade chief to discuss issues and policies critical to the NCTO membership.

The group of U.S. textile leaders who attended the high-level meetings included: NCTO Chairman Norman Chapman, who is President and CEO of Inman Mills; Parkdale Mills Chairman and CEO Andy Warlick; Unifi CEO Eddie Ingle; Barnet President and CEO Chuck Hall; Greenwood Mills President and CEO Jay Self; Palmetto Synthetics President David Poston; Milliken Director of Government Relations JP Tyson; and associate Katherine Heilig.

NCTO President and CEO Kim Glas and Todd Ethington, Director of Government Affairs, joined this distinguished group of textile leaders in leading substantive discussions on a wide range of policy issues, including fixing the de minimis loophole, strengthening China enforcement, maintaining the yarn-forward textile rule in CAFTA-DR and other trade agreements, and passing the Miscellaneous Tariff Bill (MTB).

The fly-in came at a pivotal time as congressional and federal regulatory scrutiny of Chinese imports entering the U.S. through the Section 321 de minimis trade loophole has intensified over the past couple of months, and calls to address and potentially change this little-known legal trade mechanism continue to gain momentum.

Executives met with some of the most influential members of Congress as well as the nation’s top trade chief, Ambassador Katherine Tai, who is the U.S. Trade Representative.

In the House, the China Select Committee has begun to form policy recommendations on issues like de minimis and forced labor, and in the Senate, leaders have signaled interest in crafting a China competition package this year.

Two bills have been introduced this year to combat de minimis abuse.

The first was introduced by Reps. Earl Blumenauer (D-OR) and Neal Dunn (R-FL) in the House, in conjunction with a companion bill in the Senate led by Sens. Sherrod Brown (D-OH) and Marco Rubio (R-FL) titled the u>Import Security and Fairness Act, which would effectively prohibit China and Russia from exploiting the Section 321 de minimis mechanism in U.S. trade law.

The second bill, introduced by Sens. Bill Cassidy (R-LA) and Tammy Baldwin (D-WI) is titled the De Minimis Reciprocity Act of 2023.

Two lawmakers, with whom executives met during the fly-in, have been at the forefront of hearings and probes into the business practices and models of e-commerce companies and brands that aggressively use the de minimis loophole.

Rep. Mike Gallagher (R-WI), Chairman of the House Select Committee on the Chinese Communist Party, said in hearings recently the “de minimis exception wasn’t supposed to be a loophole for foreign businesses looking to skirt human rights legislation and taxes. “It was meant to minimize the burden on customs agents actually. Shein and Temu have built empires using this loophole to underprice American competitors. American companies can’t be expected to compete against foreign firms who turn a blind eye to forced labor and dodge our import taxes.”

Rep. Raja Krishnamoorthi (D-IL), Ranking Member of the committee, has also weighed in, noting: “Temu and Shein are, as you know, some of the fastest-growing companies in the world. In particular, they use something called the de minimis exception, which means that for shipments valued at less than $800 they are able to ship directly from China to people’s homes and they are not subject to duties and there is much less information about their place of origin.”

And, House Ways and Means Chairman House Ways and Means Chairman Jason Smith (R-MO), who also met with the executives, has said it appears the loophole is “almost an $800 free trade agreement for China for products underneath that. It’s what it looks like to me.”

In addition to de minimis, the executives discussed China trade enforcement and other trade issues with Ambassador Tai, urged support for reauthorization of the Miscellaneous Trade Bill (MTB) and reiterated the importance of maintaining the yarn-forward rule of origin in free trade agreements, such as CAFTA-DR.

Rep. Blumenauer introduced a bill in June to reauthorize the MTB, TAA and GSP measures. The MTB is legislation that temporarily suspends or reduces import tariffs on manufacturing inputs that are unavailable domestically.  Textile manufacturers benefit from duty breaks on inputs such as acrylic and rayon fibers and various chemicals that are not produced in the U.S. The MTB bill lapsed at the end of 2020 and Congress has thus far not advanced legislation to reauthorize it.

With momentum for these and related trade issues, it is vital for our industry to be active in the conversation and we sincerely thank each of the NCTO executives who took time out of their busy schedules to make the trip to Washington to highlight the industry’s manufacturing strength and importance to the U.S. economy.

President Biden’s Historic Visit to Auburn Manufacturing Inc. (AMI)

Source: White House

President Biden’s historic visit to Auburn Manufacturing on Friday elevated our industry’s profile and reinforced its competitiveness and economic contribution in regional and national media headlines and news video clips across the country.

AMI CEO Kathie Leonard introduced President Biden and outlined the challenges her company has faced over the years, including inflation, unfair import competition and a once-in-a generation pandemic that nearly derailed her company. But a major battle she won against Chinese companies dumping silica fabric on the U.S. market, combined with federal policies aimed at bolstering U.S. manufacturing have led to a new era of revitalization and growth.

“We started in Mechanic Falls with two people (I was one of them) and have expanded exponentially over time. We are now in two places…and we now have over 50 people and we are track to increase our workforce by another 30 percent,” Leonard said.

“Growing a business, especially exponentially isn’t easy. We experienced many challenges over the years. First of all, the interest rate; it was 14 percent when we started building our first building. That’s pretty high. Secondly, China’s dumping of silica fabric, one of our major products, stole 30 percent of our domestic industry by 2016 and that forced us to file an antidumping case against China, and it was successful but very expensive.

Then, COVID hit just as we were recovering from what we’d been through the last several years. That was a really difficult time for all of us.

Leonard credited several policies, including the American Rescue Plan, and a focus on American manufacturing as catalysts that helped keep Auburn afloat and reignite the U.S. economy.

“So, we’re now back. We’re growing our workforce again. We are entering new markets and we’re upgrading our plants and equipment. While our tagline is ‘Innovation on Fire,’ we were on the brink of flaming out for a while. It really is now Innovation Reignited.”

To see a video clip highlighting key points from remarks by President Biden and Auburn’s Kathie Leonard please clip on the box or link below:

NCTO President and CEO Kim Glas was also in attendance at this historic presidential visit at Auburn Manufacturing and had a chance to meet briefly with President Biden. She said she talked about the importance of his visit to Auburn and to the whole U.S. textile industry. She also emphasized the resilience and competitiveness of our industry and stressed that with the help of his administration promoting policies to spur more onshoring and nearshoring, the industry will continue to be an important and vital contributor to the U.S. economy.

In his remarks, President Biden outlined the challenges manufacturing industries, such as textiles and paper, have faced over the past two decades, particularly in Maine, where Auburn Manufacturing is located.

He said past administrations and other economic policies led to the offshoring of manufacturing that “hollowed out” the U.S. manufacturing sector. “What did most of these guys do?  They decided to send the jobs overseas where the labor was cheaper and bring the product made back to the United States more expensive.  Entire towns and communities got hollowed out not just here in Maine, but all across America.  This is not just for Maine, this is all of America.  Small towns and medium-sized towns all across America factories got shut down,” Biden said.

President Biden pointed to a few examples of companies bearing the brunt of offshoring in Auburn and Lewiston, Maine.

“Let me remind you of a few examples: Auburn and Lewiston, right next door, used to be home to some of the country’s largest textile mills.  Bates Manufacturing was the largest employer in Maine with thousands of employees supplying the country with high-quality cloth and quilts,” he said.

Bates Manufacturing survived the Civil War, the Great Depression, and two World Wars.  But in the 1990s, American textile production moved overseas, and Bates closed up shop.  And by the way, my state used to be a gigantic producer of textile, the DuPont Company.”

He also highlighted similar examples of the impact on Maine’s iconic paper industry, which lost 8,000 jobs over the past two decades, he said.

“Take the Verso mill in Bucksport.  Founded in [1929].  [It] provided generations of good jobs and up to 40 percent — 47 percent of the town’s tax revenue.  A decade ago, it closed down, devastating the town, like so many thousands of towns all across America,” Biden noted.

Between 1990 and 2010, Maine lost nearly 45,000 manufacturing jobs, he said.

“And like we saw across the country, once-thriving cities and towns became shadows of what they used to be.  And when these towns were hollowed out, something else was lost as well.  And I come from Northeast Pennsylvania; I know about shutting down towns.  Pride — people lost their pride.

Folks, this is what trickle-down economics looks like.  But now we’re turning things around.”

Biden pointed to Kathie Leonard’s Auburn Manufacturing as a success story as he stood in the center of her state-of-the art facility surrounded by her employees and other invited guests.

“Like here at Auburn Manufacturing, now, you heard Kathie talk about starting this company 40 years ago making advanced textiles that are fire and heat resistant.  They weathered decades of economic storms.  Now with the help of the American Rescue Plan, they’re having their biggest export year ever.  The company is growing, and their products are made in America.”

You can view a full transcript of President Biden’s remarks here.

To listen to the full White House Clip of the event please click here.