Urgent Calls for De Minimis Loophole Reform: A High-Stakes Debate for U.S. Manufacturers

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Advocates for reforming the de minimis loophole have been highlighting the pressing need to close a gaping loophole in U.S. trade law, which has opened the door to a surge of imports that are harming American manufacturers and consumers.

National Council of Textile Organizations (NCTO) President and CEO Kim Glas outlined the gravity of the situation and severe economic and health and safety impacts of de minimis at a webinar organized by the Washington International Trade Association (WITA) on Wednesday.

Glas was joined in a panel discussion by a key U.S. Customs and Border Protection (CBP) official who outlined the administration’s support for reform and explosive growth of de minimis shipments, while depicting stark examples of the dangerous products customs officials are finding in de minimis shipments.

The panel also included opponents of comprehensive de minimis reforms including executives from FedEx and the National Foreign Trade Council.

WITA hosted the discussion following the Biden administration’s September announcement of new actions aimed at limiting de minimis shipments through a rulemaking process. At the same time, lawmakers on Capitol Hill are working toward a bipartisan solution, exploring several legislative proposals to overhaul the system.

Underscoring the issue’s importance, nearly 200 participants, including regulators, lawmakers, and representatives from the trade and business sectors, tuned into the discussion.

The stakes are high for all parties, with tens of thousands of companies, workers, and consumers suffering from the loophole, while others continue to benefit from it at the expense of U.S. manufacturers and retailers.

Currently, the de minimis provision allows 4 million shipments per day—over 1.4 billion annually—to enter the United States duty free and with minimal inspection by U.S. Customs and Border Protection (CBP).

With the explosion of e-commerce, the mechanism has become an unchecked gateway to facilitating the importation of goods made with forced labor, toxic and counterfeit products, illicit narcotics such as fentanyl and scores of other unsafe products, threatening the health and safety of consumers and undermining vital domestic manufacturing.

De Minimis: A ‘Gut Punch’ to U.S. Textile Industry

NCTO’s Glas highlighted the U.S. textile industry’s resilience and strength as a strategic supplier of PPE, U.S. military items and products for the commercial marketplace, employing more than 500,000 workers.

But “over the last 18 months the industry has lost 18 plants–18 plants that have survived the Great Recession, the Great Depression and COVID are not surviving the influx of these small [de minimis] packages coming in receiving duty free treatment, little scrutiny and facilitating forced labor product,” Glas said.

It is estimated that half of de minimis packages coming in—some 1.4 billion de minimis shipments are projected this year—are textile and apparel goods.

“This is a gut punch to an industry that is critical to the U.S. economy and critical to our supply chains,” Glas said. “It’s not just us that are impacted. Many of our retail customers who are playing by the rules are also impacted. The U.S. Congress did not vote for a free trade agreement (FTA) with China and the rest of world, but yet this is undermining all our FTA and trade preference programs.” She added the industry welcomes the demand for duty-free textile and apparel goods through carefully negotiated FTAs, of which there are 20, and trade preference programs benefiting more than 50 countries.

“I also want to address some other things that are even more important. It is one thing to lose U.S. textile companies in some of these rural communities. It is another thing to lose a family member because fentanyl and precursors are coming into the de minimis environment,” she noted. “This is very personal to them.”

“Consumer risks are great in the de minimis environment. We have had a multitude of reports on this.  Would you want to hand your child a pacifier that came in through the de minimis environment virtually unchecked?,” Glas asked.

Customs and Border Protection: “A Very Big Deal” when De Minimis Shipments Hit a Billion

Felicia Pullam, Executive Director, Office of Trade Relations, at CBP, provided startling numbers on the increase of de minimis shipments and outlined the Biden administration’s support for de minimis reform as well as a more comprehensive congressional solution.

The number of shipments has “skyrocketed” over the past several years, Pullam said.

In fiscal year 2015, de minimis shipments totaled 140 million shipments per year, but in fiscal year 2023, these shipments hit 1 billion for the first time—an increase of 660%.

“For us, it was a very big deal when hit a billion,” Pullam said.

She said de minimis shipments surpassed 1 billion by the end of the third quarter in FY 2024, “so that means we were a full quarter ahead where were last year. That is a big jump and shows you how fast this is growing.”

Notably, she said 89 percent of all our seizures in the cargo environment originated as de minimis shipments as of July 30, 2024. “That is the number of shipments—it is not volume and not value, but the number of shipments—and numbers matter to us.”

“That’s a lot of staff time, a [heavy] workload put toward that number. It also matters to the individual people who otherwise receive these violative shipments,” she said.

See her full remarks here:

Pullam said those shipments also represent 97% of cargo narcotics seizures, which largely include items like pill presses, dye sets, precursors for fentanyl and other drugs; 92% of intellectual property seizures such as trademark violations and counterfeits; and 72% of health and safety seizures.

“These are things directly impacting health and safety of consumers. That is within the cargo environment,” she added.

Pullam ticked off a list of shocking and dangerous products that CBP officials are finding in the de minimis cargo environment.

She said her most “shocking example” was a stolen helicopter that had been disassembled and shipped in small packages claiming the de minimis exemption.

Among the dangerous products threatening consumers’ health and safety coming in through the de minimis environment highlighted were: counterfeit airbags that could malfunction during a crash; counterfeit lithium ion batteries that explode; counterfeit helmets may not protect people during a fall; misbranded unapproved or counterfeit contact lenses could steal someone’s eyesight; counterfeit prescription drugs may not contain active ingredient promised or lead to accidental overdoses; faulty crib bumpers or children’s sleepwear that don’t meet U.S. standards; and many more items.

Fentanyl and its precursors and pill presses are also a “very serious issue,” she noted.

“This is one of the most important things we at CBP are focused on.”

“We are talking about numbers here but these individual packages impact real peoples’ lives,” she said, pointing to the fact that just 2 milligrams of fentanyl is enough to kill one person, while just 1 kilo of fentanyl could kill 500,000 people.

“These are very potent and each individual is impacted, whether from fentanyl or some other counterfeit good, and those are the Americans we want to protect.”

“We have been banging the drum about this to raise awareness of how important this challenge is. It really gets to the heart of why we believe de minimis needs to be reformed,” Pullam said.

Debunking the Myth about Consumer Price Impacts

The event also highlighted misconceptions spread by those opposing significant changes to de minimis.

Ralph Carter, Staff Vice President, Regulatory Affairs at FedEx, argued that “cracking down too hard on de minimis will result in a regressive tax increase, particularly on low-income Americans.”

This is a misconception that some in the trade community have been stating to slow reform efforts.

FedEx is one of several express shippers that has reportedly been lobbying against comprehensive reform of de minimis.

Carter claimed comprehensive reform of de minimis would “raise the cost for all Americans at a time when they really can’t afford that” and added that there are more effective tools to catch bad actors that don’t necessarily impose large costs on U.S. consumers, businesses and supply chains.”

But Kim Glas debunked those claims, citing studies showing that Chinese import prices have fallen dramatically and tariffs resulting from de minimis reform will not lead to higher consume prices.

“This is very personal to the U.S. textile industry,” Glas said.

“We look at consumer pricing because this is our business. Since 2011, we’ve seen unit pricing coming out of China, drop 50% on textile and apparel products—rock bottom prices. We are a deflationary industry, one that has historically been deflationary. This is not going to impact consumer prices whatsoever in this environment.”

See the exchange here:

Confronting Calls to Expand US Foreign Trade Zones to De Minimis Shipments

Glas also addressed calls to expand U.S. FTZs to de minimis shipments.

Melissa Irmen, director of advocacy and strategic relations at the National Association of Foreign-Trade Zones, a trade group representing companies in the U.S. Foreign-Trade Zones program, argued expanding de minimis eligibility to allow foreign-trade zones to benefit from duty-free treatment could preserve U.S. warehouse jobs and  help U.S. companies compete internationally.

“We should be giving our U.S. companies the same privilege as these non-U.S. companies are receiving,” Irmen said.

Glas noted that none of the debate in Washington is centered around expanding de minimis; rather the discussion is around limiting these shipments—from both sides of the aisle.

She warned that expanding de minimis eligibility to include companies in U.S. FTZs would pour fuel on a “wildfire” already ravaging the U.S. textile sector.

“Allowing all of our foreign-trade zones here in the United States to essentially be de minimis shipment hubs — where you get product shipped in from China, put it into separate boxes, people click buttons at home, coming to their doorstep — it will hypercharge a wildfire already out of control,” Glas said.

“We as a manufacturing industry are opposed to any sort of expansion of de minimis,” Glas added. “We think the best way to level the playing field is getting rid of de minimis altogether, curtailing the boxes, not rewarding this trade, closing this loophole — and we’d love to work with you on that.”

Closing

“Every day I worry that I am going to get a call that a U.S. textile company is going down or one of our regional allies is, or one of our customers in the retail supply chain is going down,” she said.

That is why NCTO is part of the Coalition to Close the De Minimis Loophole fighting to close this loophole. “We’re glad the administration took this initial action and we are calling on Congress to do comprehensive reform. It’s urgent. We need an urgent solution.”

Glas said the costs associated with de minimis cannot be calculated.

“The cost of human life and consumer protection; the cost to U.S. manufacturing…illustrates this is an urgent crisis,” she said.

“This is why other countries (South Africa, Brazil and the European Union) are taking  immediate action. They are not taking partial action. There is not enough information that can be provided to CBP,” to eliminate the dangerous impacts.

“Nobody labels boxes as precursors or fentanyl. We need to bring down the volume of boxes, help CBP get the resources they need and enact systematic, comprehensive reform on de minimis now.”

Videos by: Rebecca Tantillo

NCTO Commends Bipartisan Group of Senators for Calling on President Biden to Crack Down on China’s Predatory Trade Practices and Help the U.S. Textile & Apparel Industry

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WASHINGTON, D.C. – National Council of Textile Organizations (NCTO) President and CEO Kim Glas issued a statement today, applauding the actions of a bipartisan group of senators who are raising alarm about the impact of China’s predatory trade practices on the U.S. textile and apparel industry and calling on President Joe Biden to lead a multi-agency effort to substantially step up enforcement and develop a strategic plan to combat it. In the letter to President Biden, the senators warned that without immediate and improved enforcement against these predatory trade practices, the U.S. textile and apparel sector faces a “coming disaster.” The letter, led by U.S. Senators Thom Tillis (R-NC) and Sherrod Brown (D-OH), was also signed by Senators Raphael Warnock (D-GA), Ted Budd (R-NC), J.D. Vance (R-OH), Tim Scott (R-SC), Lindsey Graham (R-SC), and Ben Ray Luján (D-NM). Please see a link to their joint press release here. NCTO President and CEO Kim Glas, said: “I want to thank Senator Tillis and Senator Brown for leading these efforts and strongly commend the bipartisan group of senators for taking the lead in calling on President Biden and the administration to take urgent action to address a wide range of illegal trade practices that are severely impacting the U.S. textile and apparel industry.” “The industry is being overwhelmed by a multitude of compounding factors, including a lack of effective customs enforcement, unfair trade practices fueled by a loophole in U.S. trade law known as ‘de minimis’ shipments, import fraud undermining our free trade agreements (FTAs) and their rules of origin, and forced labor in our supply chains making their way into the United States and through other markets,” Glas said. The senators’ letter calls on the administration to take the following specific actions:
  • Step up enforcement of forced labor subsidized textiles and apparel flooding into our FTAs
  • End duty-free treatment for clothing made with forced labor under de minimis
  • Review all executive authorities to hold China accountable for its predatory trade practices
“To maintain the industry’s operations and competitiveness, the administration must take immediate steps to increase its enforcement activities and crack down on systemic abuse that is undermining the very fabric of our domestic textile supply chain and its workforce,” Glas added.

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NCTO is a Washington, DC-based trade association that represents domestic textile manufacturers.
  • U.S. employment in the textile supply chain was 538,067 in 2022.
  • The value of shipments for U.S. textiles and apparel was $65.8 billion in 2022.
  • U.S. exports of fiber, textiles and apparel were $34 billion in 2022.
  • Capital expenditures for textiles and apparel production totaled $2.27 billion in 2021, the last year for which data is available.
DOWNLOAD RELEASE CONTACT: Kristi Ellis (202) 684-3091 www.ncto.org

Acting Assistant U.S. Trade Representative for Textiles, Dr. Laurie-Ann Agama, Tours U.S. Textile Industry; Participates in Industry Roundtable

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WASHINGTON, D.C. – Dr. Laurie-Ann Agama, Acting Assistant U.S. Trade Representative (USTR) for Textiles, wrapped up a three-day visit of state-of-the art U.S. textile manufacturing facilities in North and South Carolina today, highlighting the importance of trade policies that bolster the competitiveness of the vibrant domestic supply chain that contributes significantly to the U.S. economy and workforce.

Dr. Agama, who advises the nation’s top trade chief on textile and apparel trade policy matters and conducts and oversees negotiations affecting textiles and apparel products, was joined by USTR textile trade officials in touring seven textile manufacturers including: Glen Raven, Barnet, Standard Textile, Parkdale Mills, Beverly Knits, Gildan, and Unifi.

Her three-day tour culminated today in an industry roundtable discussion with key textile executives hosted by Unifi, in Greensboro, N.C.

U.S. textile executives spanning the fiber, yarn, fabric, and finished product textile and apparel industries participated in the roundtable and outlined critical policies, such as: the importance of maintaining the yarn forward rule of origin in the Dominican Republic-Central America Free Trade Agreement (CAFTA-DR) and other trade agreements; advancing the Miscellaneous Tariff Bill (MTB) and its importance to domestic manufacturers; closing the de minimis loophole in U.S. trade law; addressing larger systemic trade issues, particularly the use of forced labor, with China; and upholding buy American and Berry Amendment government procurement policies.

“We deeply appreciate Assistant USTR Agama’s visit to the heart of the U.S. textile industry in North and South Carolina this week to meet with U.S. textile executives and experience first-hand the breadth of the industry’s innovation, advanced sustainability practices, capital investments and critical contributions to local economies and the U.S. economy as a whole,” said Kim Glas, president and CEO of NCTO. “The three-day visit by Dr. Agama and the USTR textile team included facility tours of several NCTO member companies, all of which have made major investments in state-of-the-art manufacturing facilities that are part of a broader domestic industry supply chain that produced $65.8 billion in output in 2022 and employed 538,000 workers.”

Glas continued: “We are also grateful for Dr. Agama’s participation in the industry roundtable hosted by Unifi and substantive discussions around policy opportunities and challenges. We look forward to working closely with Dr. Agama, the USTR textile team and U.S. Trade Representative Ambassador Katherine Tai to advance policies that provide incentives for onshoring and nearshoring production and bolstering the industry’s competitiveness, while enforcing policies that address illegal trade practices that undermine this industry.”

“The U.S. textile industry has always been resilient, innovative, and a driving force of our nation’s competitiveness,” said Acting Assistant U.S. Trade Representative for Textiles Dr. Laurie-Ann Agama. “For USTR, this local engagement and conversations underscore our need to create trade policies that put workers first and promote inclusive economic growth. The spinning, knitting, and weaving operations of the textile industry are at the center of many communities across the Carolinas. This was another opportunity to hear first-hand how we trade can create jobs that allow workers, businesses, and communities to thrive”.

 

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NCTO is a Washington, DC-based trade association that represents domestic textile manufacturers.

  • S. employment in the textile supply chain was 538,067 in 2022.
  • The value of shipments for U.S. textiles and apparel was $65.8 billion in 2022.
  • S. exports of fiber, textiles and apparel were $34 billion in 2022.
  • Capital expenditures for textiles and apparel production totaled $2.27 billion in 2021, the last year for which data is available.

DOWNLOAD RELEASE

CONTACT:

Kristi Ellis

Vice President, Communications

National Council of Textile Organizations

kellis@ncto.org |  202.684.3091

Bipartisan Group of 38 Lawmakers Sends Letter to Secretary of Commerce Urging Support of Strong CAFTA-DR Rules of Origin & Warning Against Importer-led Attempts to Change Rules

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WASHINGTON –A bipartisan group of 38 lawmakers sent a letter to Commerce Secretary Gina Raimondo urging her support of the current rules of origin in the Dominican Republic-Central America-United States Free Trade Agreement (CAFTA-DR) that are working to spur significant investment and employment in the region. The lawmakers also warned that attempts by certain importers to amend the rules would open the back door to China and significantly harm investment in the U.S. -CAFTA region and the vibrant textile and apparel co-production chain in the U.S. and the region, which employs more than one million workers. “The rules of origin governing textile and apparel production and trade under CAFTA-DR have clear benefits and have strengthened our regional supply chains by fostering a stable business environment where American and regional manufacturers can thrive. We strongly urge you to continue following the longstanding CAFTA-DR short supply list process, which requires requestors to submit public petitions for review, and reject requests to circumvent it,” the letter states. “Bypassing the existing short supply petition and review system could result in non-signatory nations gaining a backdoor entrance to CAFTA-DR benefits. We fear that the People’s Republic of China (PRC), as the dominant global supplier of yarns and fabrics, would be the major winner under this proposal,” they wrote. Please also see a press release from Rep. McHenry here quoting NCTO President and CEO Kim Glas. The letter, made public today, was sent in advance of a Senate Finance Subcommittee hearing titled, “Economic Cooperation for a Stronger and More Resilient Western Hemisphere,” scheduled for today at 3 pm. Many in Congress and the administration have maintained support for a strong rules-based CAFTA-DR. Most recently, U.S. Trade Representative, Ambassador Katherine Tai, voiced her strong support for the current CAFTA-DR rules in a special video presentation at NCTO’s annual meeting at the end of March. See her remarks here. ### NCTO is a Washington, DC-based trade association that represents domestic textile manufacturers.
  •    U.S. employment in the textile supply chain was 538,067 in 2022.
  • The value of shipments for U.S. textiles and apparel was $65.8 billion in 2022.
  • U.S. exports of fiber, textiles and apparel were $34 billion in 2022.
  • Capital expenditures for textiles and apparel production totaled $2.27 billion in 2021, the last year for which data is available.
CONTACT: Kristi Ellis Vice President, Communications National Council of Textile Organizations kellis@ncto.org |  202.684.3091

Glen Raven Hosts Deputy Assistant Secretary Jennifer Knight, Highlighting Industry’s Competitiveness, Sustainability, Capital Investments & Jobs

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WASHINGTON –Glen Raven hosted Jennifer Knight, Deputy Assistant Secretary for Textiles, Consumer Goods, Materials Industries, Critical Minerals and Metals with the U.S. Department of Commerce’s International Trade Administration, at the company’s state-of-the art manufacturing facility in Anderson, South Carolina today, where the company manufactures its Sunbrella® flagship brand. The company is beginning to scale a major expansion plan started in 2021, illustrating continued investment and growth by a leader in the U.S. textile industry and its importance to the U.S. economy. “We were honored to host Deputy Assistant Secretary Knight at our Sunbrella facility in Anderson, South Carolina to give her a firsthand experience of our advanced manufacturing facilities, sustainable initiatives, and the passionate work of our U.S. manufacturing teams,” said Glen Raven CEO Leib Oehmig. “The opportunity to discuss with a key trade official the impact of our nation’s global trade polices on our company and our dedicated workers is invaluable. We highlighted the importance of Glen Raven’s contribution to our local communities, as well as the critical need to maintain a domestic textile and apparel industry and to promote policies that support a resilient and competitive supply chain, innovation and research and a vibrant and well-trained workforce. We are thankful for Deputy Assistant Secretary Knight’s commitment to understanding the challenges we face in the global trade arena and appreciate the dialogue we had with her here today.” “Public-private sector engagement is key to supporting a competitive and resilient textile and apparel supply chain and I am pleased to visit Glen Raven, a prime example of our modern domestic textile industry with its state-of-the-art manufacturing facilities for high-performance fabrics,” said Deputy Assistant Secretary Knight. “ITA continues to support American manufacturers and recognizes the importance of building an innovative, diverse and skilled workforce.” Glen Raven, a family-owned company founded in 1880, operates five manufacturing facilities in North and South Carolina employing 2,500 people, including their joint venture with Shawmut Corporation. The company is currently in the process of scaling a $250 million multi-phase U.S. capacity expansion plan of its facilities and infrastructure to meet customer demand. At Glen Raven, Knight toured Glen Raven’s Sunbrella® facilities, part of the company’s Custom Fabrics division, which includes flagship brands Sunbrella® and Dickson®. Glen Raven also has two other divisions, including Glen Raven Technical Fabrics with GlenGuard®, StrataTM and Glen Raven Logistics; and Trivantage, one of the nation’s largest business-to-business distributors for the awning, marine, upholstery and shade sail industries. Glen Raven is a leader in the upholstery, marine, shading, automotive, military, geotextile, and protective workwear markets and operates national distribution and logistics subsidiaries. Knight’s visit to Glen Raven’s Sunbrella® facilities comes at a critical time for the company and the U.S. textile supply chain, which produced $65.8 billion in output in 2021 and employed 538,000 workers. Glen Raven is part of the broader textile industry that is a critical manufacturing segment contributing to job growth, investments, and innovation. From 2012-2021, capital investment in U.S. yarn, fabric, apparel & sewn products manufacturing totals $20.9 billion.

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NCTO is a Washington, DC-based trade association that represents domestic textile manufacturers.

  • U.S. employment in the textile supply chain was 538,067 in 2022.
  • The value of shipments for U.S. textiles and apparel was $65.8 billion in 2022.
  • U.S. exports of fiber, textiles and apparel were $34 billion in 2022.
  • Capital expenditures for textiles and apparel production totaled $2.27 billion in 2021, the last year for which data is available.
DOWNLOAD RELEASE CONTACT: Kristi Ellis (202) 684-3091 www.ncto.org

Sustainability and the Domestic Supply Chain: Unifi

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Unifi’s Meredith Boyd describes how Repreve has made Unifi a leading innovator in manufacturing sustainable synthetic & recycled performance fibers. Hear more from her & other industry experts during NCTO’s webinar 10am on 2/15.

This special event is scheduled for 10 am on Wednesday, February 15, and will feature a panel of industry experts from Unifi, BASF, The LYCRA Company, and Origin USA. 

Register today: lnkd.in/e5FHU2eD

Domestic Textile Groups Tell Biden Administration Penalty Tariffs Counteract China’s Unfair Trade Advantage & Give American Producers a Chance to Compete

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WASHINGTON –The Biden administration’s Section 301 penalty tariffs on finished textiles and apparel counteract China’s unfair trade advantages and give U.S. manufactures a chance to compete, two key American textile manufacturing groups told the Biden administration today. Removing tariffs, the associations said, would reward China, put U.S. manufacturers at a competitive disadvantage and do nothing to reduce inflation. In a formal submission to the U.S. Trade Representative’s (USTR) office, which is conducting a four-year statutory review of the tariffs, the associations, representing the entirety of the U.S. textile production chain, expressed strong support for the continuation of current Section 301 penalty tariffs on finished textiles and apparel imports from China and outlined the effectiveness of U.S. tariff actions. “In some cases, such as on finished apparel, the tariffs have worked to partially offset and counteract China’s unfair trade advantages,” the groups said. “The tariffs on finished textile and apparel items are giving U.S. manufacturers the chance to compete, and we are seeing encouraging investment and growth in moving some production and souring from China back to the Western Hemisphere.” “The CAFTA-DR [Dominican Republic-Central America Free Trade Agreement] region has seen more than $1 billion in new textile and apparel investment this year, for example, which is historic and due to the textile and apparel rules negotiated under the agreement and sourcing shifts from China,” they added. “This investment and growing U.S. imports from the Western Hemisphere is attributable in part to the 301 tariffs on finished apparel.  The tariffs on finished items in our sector are broadly supported by textile/apparel producers in the hemispheric co-production chain, and it is essential that they remain in place, absent China reforming its practices.” The submission was filed by the National Council of Textile Organizations (NCTO) and the U.S. Industrial and Narrow Fabrics Institute (USINFI). The groups have long advocated for a fair, transparent process to remove tariffs on textile machinery, certain chemicals and dyes and limited textile inputs that cannot be sourced domestically to help U.S. manufacturers compete against China. They also stressed that lifting the tariffs on finished textiles and apparel products from China “will solidify their global dominance in this sector for generations to come and reward their abusive behaviors, exacerbate the migration crisis, hurt domestic manufacturers and workers, undermine our ability to recalibrate essential PPE supply chains, and blunt the positive supply chains shifts and investments in the Western Hemisphere that are happening.” They added it would “do nothing to solve the inflation crisis facing U.S. consumers and manufacturers right now.” See the full submission here. The National Council of Textile Organizations (NCTO) is a not-for-profit trade association established to represent the entire spectrum of the United States textile sector, from fibers to yarns to fabrics to finished products, as well as suppliers of numerous support services such as trucking, banking, chemicals, and other such sectors that have a stake in the prosperity and survival of the U.S. textile sector.  U.S. textile and apparel manufacturers produced $65.2 billion in output in 2021, and our sector’s supply chain employs 534,000 workers from fiber to finished sewn products.  NCTO’s headquarters are in Washington, DC.  www.ncto.org The United States Industrial and Narrow Fabrics Institute (USINFI)  Member companies manufacture highly-specialized textile products, advanced materials, and components used to support a variety of high-value-added and sophisticated industries.  These include the aerospace, automotive, construction, marine, medical, military, and safety/protective gear sectors among others.  USINFI currently has over 90 member companies, and its headquarters are in Roseville, MN. https://usinfi.textiles.org/ DOWNLOAD RELEASE

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NCTO is a Washington, DC-based trade association that represents domestic textile manufacturers.

CONTACT: Kristi Ellis Vice President, Communications National Council of Textile Organizations kellis@ncto.org |  202.684.3091

NCTO Member Spotlight: Carolina Cotton Works

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Carolina Cotton Works, Inc. President Bryan Ashby highlights his company’s important contribution to the U.S. textile supply chain. CCW is a family-owned textile dyeing and finishing company that serves industries from performance apparel to aerospace textiles.
http://www.carolinacotton.com/

Bloomberg Exposé on Shein Reveals Clothing Contains Banned Forced-Labor Cotton, Underscores Urgency to Close a U.S. Loophole

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Bloomberg News has published a hard-hitting investigative story this week that released findings of lab testing results that confirms certain clothing sold by e-commerce juggernaut Shein has been found to contain banned cotton produced with forced labor from the Xinjiang region of China.  Furthermore, the story details how Shein is utilizing a trade loophole called “de minimis” that is facilitating the entry of these banned products into the U.S. market with minimal scrutiny.

The Bloomberg feature story by reporter Sheridan Prasso titled, “Shein’s Cotton Tied to Chinese Region Accused of Forced Labor,” outlines how “laboratory testing conducted for Bloomberg News on two occasions this year found that garments shipped to the U.S. by Shein were made with cotton from China’s Xinjiang region.”

The exposé chronicles how cotton grown and harvested by Xinjiang forced labor continues to bleed into global textile and apparel supply chains and is further facilitated by a little-known trade loophole called the “Section 321 de minimis exception”. This exception, which is routinely utilized by Shein and certain other e-commerce companies, allows imports valued under $800 to come into the United States with minimal review and without paying duties, taxes, and fees.

Through this massive and rapidly growing loophole, approximately 2.7 million individual shipments falling below an $800 value enter the U.S. market each day, according to the latest data. In fact, the U.S. is on record pace for 1 billion de minimis shipments this year alone.

The explosion in e-commerce shipments using the Section 321 tariff waivers spawned new companies, like Shein, to create a multi-billion-dollar empire built on the foundation of a legal, but severely damaging tariff loophole.

We don’t know who is making these products, if they are safe, or if they use forced labor. In fact, unbelievably, these products get rewarded duty-free status. What’s the point of a free trade agreement with high labor and environmental standards, if there is a “click here” workaround that facilitates a race to the bottom?

According to the report, Agroisolab GmbH in Jülich, Germany, tested the garments using stable isotope analysis, “which measures variations in the isotopes of carbon, oxygen and hydrogen present in the cotton’s fibers to indicate the altitude and other climate characteristics of the region where it was grown.”

The lab compared Shein’s cotton fabric with fabric from Xinjiang that Bloomberg obtained from a U.S. apparel company with operations in China. A second test compared the Shein item with another sample the lab had previously obtained from Xinjiang, according to the Bloomberg report.

“We have to conclude it is a typical sample from Xinjiang, China,” Agroisolab’s CEO Markus Boner told Bloomberg.

The test results also ruled out “with more than 95% probability” several other cotton-growing regions, including India, Egypt, Australia, the U.S. and China’s Shandong province, according to the story.

Congress overwhelmingly supported and passed the Uyghur Forced Labor Prevention Act (UFLPA) banning products made of forced labor, including Xinjiang cotton. This law took effect in January 2021. Yet, this loophole in our tariff structure, has created an enormous workaround that is allowing these banned forced labor products to  make their way to our doorsteps and into our closets on a daily basis.

House Ways and Means Trade Subcommittee Chairman Earl Blumenauer (D-OR), who has authored and continues to push for key legislation to help close this loophole, has noted: “This loophole also makes it easier for people to import illegal goods and harmful products, because there is virtually no way to tell whether these packages contain products made through forced labor, intellectual property theft, or are otherwise dangerous.”

Until Congress and/or the administration acts to close the de minimis loophole, Chinese companies like Shein will continue to run a speeding train right through this loophole tunnel.

The National Council of Textile Organizations (NCTO) has been very active over the past several years working in a broad coalition to amplify the urgent need for the administration and Congress to use their authorities to close this enormous trade gap.

In congressional testimony before the House Ways and Means Trade Subcommittee last December, I outlined recommendations for Congress aimed at confronting unfair Chinese trade practices, including closing the de minimis loophole.

We must ensure this loophole is addressed immediately to combat the use of forced labor in China and in other areas of the world. Failure to address the de minimis loophole will continue an “open door” policy that invites China and others to ship duty free to the United States illegal and unsafe products that undermine American businesses and jobs, while also diluting any efforts to rein in its abhorrent human rights abuses.

What cannot be ignored is that these practices and this loophole continue to hurt domestic manufacturers, undermine our forced labor laws, and weaken our carefully negotiated free agreement trade structure.

This is why we need Congress and the administration to urgently act and make the policy changes we need to close this damaging loophole once and for all.

Barnet Hosts Congressman Greg Murphy (R-N.C.); Highlights the Importance of Supporting Policies that Bolster the Competitiveness of the U.S. Textile Industry

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WASHINGTON, DC – Congressman Greg Murphy (R-N.C.) met with executives at William Barnet & Son LLC (Barnet) and toured a facility in Kinston, N.C. today, where the company’s innovation, advances in sustainable practices and its important contribution to the North Carolina economy were on full display. Congressman Murphy’s visit is critical and comes at a pivotal time for the U.S. textile supply chain, which produced $65.2 billion in output in 2021 and employed nearly 535,000 workers. Barnet is part of the broader industry that is a major factor in high-tech and sustainable innovation in the production of everything from heart valves and stents to aircraft bodies and advanced body armor. Barnet is a global manufacturing, recycling, and trading company, specializing in a wide range of fibers, polymers and yarns. Founded in Albany, N.Y. in 1898 by William Barnet, the company has been dedicated to a vision of being the world’s most respected, creative, versatile and sustainable solution provider to its customers and suppliers. The company currently employs over 400 employees worldwide. During the discussion with Congressman Murphy, Barnet executives discussed several policy priorities that have far-reaching implications for North Carolina and the entire U.S. textile industry. They also outlined the importance of policies aimed at bolstering onshoring and nearshoring production, closing a legal loophole in U.S. trade law that continues to undermine American manufacturing and gives China an advantage, and U.S. trade policy on China. “We are honored to have hosted Dr. Murphy at our Kinston facility today,” said Chuck Hall, president of Barnet. “The opportunity to discuss important policies that impact not only our everyday business operations but the entire industry’s operations is invaluable. It is critical that U.S. trade policy centers around keeping the industry competitive. In particular, we discussed the need to maintain China 301 penalty tariffs, to fix a loophole in U.S. trade law known as the de minimis mechanism, which allows a package of goods valued at $800 or less per person to come into the country duty free every day and gives China backdoor access to the U.S. market, and to find a better process for renewing the Miscellaneous Tariff Bill (MTB) which allows U.S. manufacturers duty-free access to raw materials that are no longer produced within our borders. We look forward to continuing to the work with the congressman on policies that help drive onshoring and nearshoring to the U.S. and the Western Hemisphere and those that support strong government procurement and American-made products.” “It was wonderful to meet with Barnet’s officials and tour their impressive textile facility today. North Carolina’s textile industry is a huge driver for our economy, directly employing nearly 40,000 workers and generating over $2.7 billion in textile-related exports,” said Rep. Greg Murphy, M.D. “I am grateful to the industry leaders who took the time to discuss how we can expand this great industry, grow our state’s economy, and protect domestic manufacturing.”

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NCTO is a Washington, DC-based trade association that represents domestic textile manufacturers.

  • U.S. employment in the textile supply chain was 534,000 in 2021.
  • The value of shipments for U.S. textiles and apparel was $65.2 billion in 2021.
  • U.S. exports of fiber, textiles and apparel were $28.4 billion in 2021.
  • Capital expenditures for textiles and apparel production totaled $1.85 billion in 2020, the last year for which data is available.
Download Release CONTACT: Kristi Ellis Vice President, Communications National Council of Textile Organizations kellis@ncto.org |  202.684.3091