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.
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https://textilesinthenews.org/wp-content/uploads/2017/12/logo-header.png00Kristi Ellishttps://textilesinthenews.org/wp-content/uploads/2017/12/logo-header.pngKristi Ellis2023-08-02 14:58:162023-08-03 11:36:40Textile Execs Discuss Nearshoring Trends, Policies to Bolster the U.S. Textile 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.
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 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.
https://textilesinthenews.org/wp-content/uploads/2017/12/logo-header.png00Kristi Ellishttps://textilesinthenews.org/wp-content/uploads/2017/12/logo-header.pngKristi Ellis2023-08-01 13:29:072023-08-03 11:36:50President Biden’s Historic Visit to Auburn Manufacturing Inc. (AMI)
The 4th of July is an American holiday unlike any other, complete with backyard BBQs, parades, national concerts, and, of course, fireworks. At the height of summer, Americans across the country gather to celebrate our unique history and the values that define the American spirit of independence.
In that same spirit, the National Council of Textile Organizations celebrates Independence Day this year with a look at the history of the U.S. textile industry, which has played a remarkable role in America’s industrial and economic independence through a history of significant investment, employment, and technological development and innovation.
The birth of the textile industry in the U.S. coincides with our independence from England. Despite England’s best attempts to monopolize textile production by forbidding the exportation of textile technology and intellectual property, creative minds found their path to the States not long after the U.S. gained its independence in 1776 (2020, Frederic Magazine, Innovation or Bust! The Surprising Story of New England’s Textile Heyday).
In 1789, Samuel Slater, who would come to be known as the father of American Manufacturing, immigrated to the U.S. with the goal of establishing the country’s first textile mill. He did just that in 1791 by establishing the first yarn mill through his partnership with American entrepreneur and abolitionist Moses Brown. Shortly after, in 1793, American inventor Eli Whitney developed the cotton gin, rapidly increasing the efficiency of sorting cotton seed from cotton fiber. These two critical innovations paved the way for Francis Cabot Lowell, an American merchant, to build the first integrated textile factory in the United States, capable of converting raw cotton into finished cloth in one mill. The ingenuity and efforts of these pioneers in the textile sector marked the start of the Industrial Revolution in America, which allowed the U.S. to establish the economic freedom and security it needed to grow as a young nation. (ibid.)
Now, more than 200 years later, America still boasts a vibrant, multifaceted textile industry that employs 538,067 workers nationwide. From textile fibers to apparel and other sewn products, the industry excels at producing high-tech, innovative solutions for both the American and global market alike. In fact, the United States is the world leader in textile research and development, with the U.S. textile complex developing next generation textile materials such as conductive fabric with anti-static properties, electronic textiles that can monitor heart rate and other vital signs, antimicrobial fibers, and new fabrics capable of adapting to the climate to make the wearer warmer or cooler. These developments make the U.S. textile industry, along with its suppliers and customers, an important component of the U.S. economy. The industry also provides much needed jobs in rural areas and has functioned as a springboard for workers out of poverty into good paying jobs for generations.
Despite these successes, the industry has faced extreme competition from overseas producers for more than 40 years. While such competition helps to foster incredible innovation amongst American textile companies to remain viable, the U.S. textile industry has consistently dealt with an uneven global playing field due to rampant foreign subsidies, closed offshore markets, and substandard environmental and human labor conditions. These varying standards result in a global sourcing entities seeking lowest-cost products often of poor quality and built on massive carbon emissions from distant supply chains and even forced labor (2023 Sourcing Journal, Forced Labor and the De Minimis Loophole: Two Sides of the Same Coin)
Further, the offshoring of such a critical industry, responsible for manufacturing products of key importance to our national health and defense, poses national security risks. This risk was made fully apparent at the onset of the COVID-19 pandemic, when American citizens, hospitals and frontline workers found themselves unable to access critical personal protective equipment (PPE) due to the complete offshoring of supply chains to low-cost overseas’ competitors. In response, the American textile industry made heroic efforts to retool production and operations virtually overnight, producing millions of face masks, isolation gowns, testing swabs and other critical medical textiles when our country needed it most.
Despite these heroic actions and the coinciding investments that were made by American business owners, these critical supply chains are already at risk of being offshored again. To ensure that they do not, it is critical that the federal government expeditiously implement recently adopted legislation governing domestic procurement, such as the Make PPE in America Act. This legislation, which resulted from the harsh lessons learned during the supply chain crises of COVID-19, is designed to reshore and maintain a strategic PPE production chain in the United States by requiring that the Departments of Health and Human Services, Homeland Security, and Veterans Affairs procure only PPE that is wholly made (i.e., 100 percent made in the USA, from the production of the fiber to the yarn, fabric, and finished product) and assembled in the U.S. This important legislation also requires a contract duration for federally procured PPE of no less than two years. Such long-term commitments provide domestic manufacturers with a consistent demand signal that allows them to invest, plan, develop and deliver the medical protective goods our government and nation depend on for safety and security.
At the same time, the research and development needed to produce such innovations requires significant financial commitments. From 2012 to 2021, the U.S. textile industry invested $20.9 billion in new plants and equipment. During this time, U.S. manufacturers opened new facilities throughout the textile production chain, including recycling facilities to convert textile and other waste to new textile uses and resins. These advancements reveal the direct relationship between investment, innovation, and long-term competitiveness. To survive in the constantly evolving and increasingly competitive landscape that dictates textile and apparel production, companies must constantly develop new ways to manufacture inputs and goods more efficiently.
It does not take much to see why U.S. textiles are a quintessential story of American spirit and industry. So, as we take this holiday to pause and celebrate the individual and economic freedoms we enjoy daily, let us also celebrate the rich history of American textiles as a critical part of industrial importance. Thanks to manufacturing efforts such as theirs, American citizens can access everything from high-quality everyday textile items to sophisticated textile technologies. By keeping critical supply chains and their research close to home, Americans are guaranteed more sustainable and reliable access to essential products when we need them most.
As we celebrate the 4th of July and American independence, we recognize that many of our forefathers took sizable business and investment risks that has helped foster our modern economy from which we all benefit today. And a strong economy allows us to safeguard our independence.
American manufacturing needs Congress and the Administration’s continued support to help shape trade and economic policies that provide a level-playing field for the U.S. industry. Please contact the National Council of Textile Organizations to discuss how you can support the domestic textile and apparel industries in their efforts to reshore and regionalize supply chains and strengthen U.S. manufacturing.
https://textilesinthenews.org/wp-content/uploads/2017/12/logo-header.png00nctohttps://textilesinthenews.org/wp-content/uploads/2017/12/logo-header.pngncto2023-06-30 09:09:302023-07-19 14:41:49NCTO Celebrates American Independence, Innovation & Textiles
(Op-Ed by NCTO President and CEO Kim Glas featured in Sourcing Journal and found on its site here.)
In a classic example of the government’s left hand not working in concert with the right, two contrary policies are facilitating the importation of millions of products into the U.S. market each day to unknowing consumers likely purchasing items made with forced labor and counterfeit products.
And it continues to put American manufacturers, workers, and consumers at risk without a legislative fix.
The policies at the heart of the issue are the recently implemented Uyghur Forced Labor Prevention Act (UFLPA) and a little-known legal trade mechanism dubbed “Section 321 de minimis,” in U.S. trade law that is in turn being exploited by Chinese e-commerce companies, online marketplaces and other mass marketers.
The de minimis mechanism allows a package of goods valued at $800 or less per person to come into the country duty-free every day. With the explosion of e-commerce shipments in recent years, it is now being aggressively used by Chinese e-commerce companies and other mass marketers that are shipping in millions of products directly to consumers that otherwise would be subject to tariffs, penalty tariffs, taxes, and customs inspection.
According to a recent Wall Street Journal article, there is a “big problem” with U.S. efforts to stop imports of Chinese products made with forced labor due to the de minimis loophole that allows millions of shipments duty-free that require little paperwork and are largely uninspected.
While Congressnever intended for banned products made with forced labor in Xinjiang, China, to enter the U.S. market through the de minimis provision, every day, more than 2 million uninspected shipments enter the U.S. market exploiting this loophole.
In fact, the flood of de minimis shipments into the U.S. has turned into a virtual tsunami, soaring more than 350 percent over the past 6 years and overwhelming our ports and the government’s ability to adequately enforce bans on counterfeits, fentanyl and other illicit drugs, and goods made with forced labor. De minimis shipments have undoubtedly spiked in recent years beyond the 2 million shipments U.S. Customs and Border Protection (CBP) estimated were arriving per day in fiscal year 2021. This compares to fiscal 2016—the year Congress increased the de minimis threshold from $200 to $800—when CBP data estimated 150 million shipments entered the U.S. annually.
So, an efficiency tool for the Customs service, originally intended to take the burden off the agency on low-value items such as souvenirs brought back by tourists, has now been reportedly exploited by e-commerce companies and mass marketers for business efficiencies to skirt tariffs and the UFLPA—a glaring contradiction that undermines the efficacy of laws and Customs regulations and a huge win for China.
In effect, U.S. textile producers and other manufacturers are not only competing with forced labor production, but an import duty scheme that rewards such behavior in the form of a tariff subsidy. All of this is occurring in clear violation of the UFLPA. The exploitation of de minimis translates into a “de maximis” impact on domestic textile companies and those in our Free Trade Agreement partner countries.
While Congress raised the duty-free limit for de minimis shipments from $200 to $800 seven years ago, the Chinese government keeps its own de minimis threshold to a meager $8.
Fortunately, congressional leaders on both sides of the aisle have recently sounded the alarm about the de minimis mechanism, how it is reportedly exploited by Chinese e-commerce companies such as Shein and other mass marketers, and the backdoor access it provides to products made with forced labor in Xinjiang.
In the latest congressional action, Reps. Earl Blumenauer (D-OR) and Neal Dunn (R-FL), and Sens. Sherrod Brown (D-OH) and Marco Rubio (R-FL), introduced bipartisan legislation on Thursday in their respective chambers that would effectively prohibit non-market economies, including China and Russia, from exploiting the Section 321 de minimis mechanism. “The de minimis loophole is a threat to American competitiveness, consumer safety, and basic human rights,”said Rep. Blumenauer, who is ranking member on the House Ways & Means Trade Subcommittee. “It is used by primarily Chinese companies to ship over two million packages a day into the United States. It puts American businesses at a competitive disadvantage while flooding American consumers with undoubtedly harmful products.”
Separately, a group of more than two dozen bipartisan House members sent a letter to the acting commissioner of U.S. Customs and Border Protection, expressing concern that Shein and other companies with direct-to-consumer business models may be “actively skirting import restrictions and evading CBP enforcement, selling goods in the U.S. in violation of the UFLPA” by using the de minimis mechanism. The lawmakers pointed to a Bloomberg News investigative report, in which lab testing conducted by the news outlet reportedly turned up cotton from Xinjiang in Shein’s apparel products.
House Ways & Means Chairman Jason Smith (R-MO) recently agreedthis is a major problem. “It appears that loophole is almost an $800 free trade agreement for China for any products underneath that,” Smith said at a recent hearing.
And the House Select Committee on the Chinese Communist Party (CCP) recently opened a probe into companies and brands at the center of allegations over tainted apparel tied to forced labor in Xinjiang and the reported abuse of the de minimis loophole.
The stakes are high. It is time for Congress to take a stand and fully close the de minimis loophole. Failure to do so not only undermines the intention of the UFLPA, but also indirectly bolsters forced labor abroad.
Due to exploitative business practices, de minimis and forced labor have become two sides of the same coin. This coin should be taken out of circulation.
Kim Glas is the president and CEO of the National Council of Textile Organizations and is the former Deputy Assistant Secretary for Textiles and Apparel at the U.S. Department of Commerce.
https://textilesinthenews.org/wp-content/uploads/2017/12/logo-header.png00Kristi Ellishttps://textilesinthenews.org/wp-content/uploads/2017/12/logo-header.pngKristi Ellis2023-06-21 12:24:142023-06-22 10:43:10Forced Labor and the De Minimis Loophole: Two Sides of the Same Coin
At 1pm on Wednesday, July 12, NCTO will conduct a webinar to introduce Bluecrew, a W-2 staffing platform, designed to meet the challenge of labor demand across the light industrial, manufacturing, and transportation/distribution industries. During the webinar, representatives from Bluecrew will provide an overview of the platform and its services, with a tailored look at how the platform can help solve labor shortages across our industry.
To preview this event, please view the below Q&A NCTO conducted with Bluecrew:
What is Bluecrew?
Bluecrew’s workforce as a service helps businesses address the challenges of variable demand by combining an agile high-quality workforce, powerful management technology, and actionable data. Our platform gives workplaces instant access to 100k+ W-2 hourly workers who are prequalified, background checked, and e-verified.
What makes Bluecrew different from other staffing and labor recruitment services?
Traditional: It takes about 24 days to fill an open job when you stick to the traditional method of hiring: coordinating a post with the agency, waiting for it to fill… and then hoping the worker(s) shows up. Our app gives you 24/7 instant access to qualified, prescreened W-2 workers, and positions are often filled in hours. And if they’re not, we have the data to tell you why.
Gig: We’re W-2 only, because high quality workers—and you—shouldn’t settle for less. With our platform + app, you can also schedule our Crew Members without the additional burden of worrying about misclassifying employees, missing a legal requirement, or providing your own benefits and insurance (saving you about 20% in labor costs in the process).
What types of jobs does Bluecrew fill?
Full or part-time, short or long-term, Bluecrew specializes in positions across the supply chain (manufacturing, warehousing, freight and logistics) and hospitality industries (hotels and lodging, food and beverage, events) but we’re constantly expanding the areas we support.
What makes Bluecrew an optimal solution for the textile industry specifically?
Because Bluecrew builds pools of workers who have gone through a background check, e-verification check, as well as additional onboarding prerequisites, we’re able to supply the textile industry the people you need when you need them. We can assist in long-term positions that could become permanent, or we could help out because you got an unexpected surge in business. Our platform is built to serve your needs.
Dr. Laurie-Ann Agama, Acting Assistant U.S. Trade Representative for Textiles, who toured seven NCTO member companies’ state-of-the-art manufacturing facilities earlier this month, said she came away from the meetings with “a better and deeper understanding of the challenges and opportunities U.S. manufacturers face in trade.”
Dr. Agama, who was accompanied by a U.S. textile trade team, experienced firsthand the industry’s innovation, resilience, and breadth of products in visits at the following NCTO member companies: Glen Raven, Parkdale Mills, Unifi, Gildan, Barnet, Standard Textile and Beverly Knits.
“We learned a lot about the trade issues affecting the textile industry and I come away from this trip with a better and deeper understanding of the challenges and opportunities U.S. manufacturers face in trade – I have a number of specific case studies and stories to share which clearly illustrate how trade and commerce affect people and communities in the United States,” Dr. Agama said in an email to NCTO staff.
Her visit comes at a pivotal time for the U.S. textile industry, which produced $65.8 billion in output in 2022 and employed 538,000 workers. The broader textile supply chain in the U.S. is a critical manufacturing segment contributing to job growth, investments, and innovation. From 2012-2021, capital investment in U.S. yarn, fabric and apparel and sewn products manufacturing totals $20.9 billion.
In addition, U.S. textile companies have been strong partners with the administration’s “Call to Action” for Central America to address the root causes of outward migration, spurring $2 billion in textile and apparel investments in the region in the past 18 months and bolstering a vibrant co-production chain that supports more than 1 million workers in the U.S. and the region.
Washington policies matter now more than ever, particularly this year, in which the industry has seen weakening orders due to economic headwinds, a continuing glut of inventory at retail, and a production slowdown, which taken together, are creating a more challenging business environment for the industry. That is why an industry roundtable with industry executives at the end of Dr. Agama’s three-day tour hosted by Unifi in Greensboro, N.C. was imperative.
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 gathered a lot of technical information and saw first-hand the innovation, automation, and investments that have been made to improve U.S. competitiveness and gathered insights on how trade and U.S. trade policy affect and could support the industry and their business decisions to increase jobs in the United States and Central America and could facilitate increased production and exports,” Dr. Agama said. “This tour further strengthened our already strong relationships and partnerships.”
NCTO President and CEO Kim Glas, who toured the facilities and participated in the industry roundtable, lauded the visit by Dr. Agama and the USTR textile team, noting “the substantive discussions provided critical insight into the importance of the U.S. textile industry to local economies and the overall U.S. economy, while giving textile executives an opportunity to demonstrate their innovative prowess and explain how Washington policies translate into everyday impact on their business operations.”
“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 incentivize domestic and regional manufacturing, while enforcing legislation that addresses illegal trade practices, such as forced labor and transshipments, that undermine this industry,” Glas said.
Dr. Agama concluded, “I look forward to continuing to work with you [NCTO and the industry] to increase U.S. textile trade, support industry’s efforts to create new jobs, provide good wages and benefits to their workers, and commitments to generate overall positive impacts in surrounding communities, especially in rural areas similar to those we visited and passed through in N.C. and S.C.”
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https://textilesinthenews.org/wp-content/uploads/2017/12/logo-header.png00Kristi Ellishttps://textilesinthenews.org/wp-content/uploads/2017/12/logo-header.pngKristi Ellis2023-06-21 10:11:042023-06-21 12:28:01Main Takeaways from Key Textile Trade Negotiator’s Visit to the Carolinas and the Heart of the American Textile Industry
Every Memorial Day, Americans pause to honor the lives of those who have died serving our country as a member of the U.S. military. It is a day dedicated to their heroic sacrifices based on a belief in American values and the hope for a better future. It’s also a day for celebration. As the official kickoff to the summer season, it is a day for community, barbeques, and setting our minds to the warm summer days ahead.
In the spirit of honoring our military heroes and anticipating the excitement of summer, the National Council of Textile Organizations celebrates Memorial Day with a look at some of the unique aspects of the U.S. textile supply chain and its role in serving our heroes in uniform.
The history of the U.S. textile industry’s service to the U.S. military is as old as the military itself. From the uniforms soldiers rely on for protection from the elements to the flags hoisted high above our causes, American textiles have always held a critical role in military operations and symbolism.
That history of course still thrives today. As the face of modern warfare has evolved, U.S. textile technology has kept pace by consistently developing new, cutting-edge textile technology to ensure the top performance and protection our warfighters demand and deserve. Each year, the U.S. textile industry supplies over 8,000 different types of products, ranging from advanced body amor to aircraft bodies, to our men and women in uniform, making it a key contributor to our national defense and supplies.
Further, the development of textile innovations for military use plays a critical role in U.S. textile competitiveness within the global market, while giving consumers access to sophisticated textile products useful for their everyday lives. For example, everyday products from Kleenex to Kevlar are available today thanks to military-funded research and development. And it’s no surprise that textiles developed for military use are amongst the most innovative in the world. In fact, the United States is the world leader in textile research and development, with the U.S. textile complex developing next generation textile materials such as conductive fabric with anti-static properties, electronic textiles that can monitor heart rate and other vital signs, antimicrobial fibers, and new fabrics that adapt to the climate to make the wearer warmer or cooler. To ensure that the continued research and manufacturing needed to provide high-performance textile materials to the U.S. military comes from a reliable source in times of crisis, those products must be supplied by a vibrant American textile production chain.
Still, the research and development needed to produce such innovations requires significant financial commitments. From 2012 to 2021, the U.S. textile industry invested $20.9 billion in new plants and equipment. During this time, U.S. manufacturers opened new facilities throughout the textile production chain, including recycling facilities to convert textile and other waste to new textile uses and resins.
But industry cannot carry this financial burden alone. With extreme competition from offshore manufacturers with varying ethical and sustainability practices and oversight, U.S. textile manufacturers are often left competing against low-cost suppliers with substandard environmental, workplace safety and labor practices. As we saw at the onset of COVID-19 in 2020, our reliance on such offshore suppliers and their production chains leaves the U.S. vulnerable when confronted with a health pandemic or a serious challenge to our national security.
For that reason, it is beyond necessary to bolster our industry’s efforts to equip our military through federal legislation and procurement practices that prioritize domestic manufacturing. This can be done by preserving and expanding key legislation, such as the Kissell and Berry Amendments, which require the domestic production of textiles procured by the Department of Defense and some agencies within the Department of Homeland Security.. In addition, it is critical that we support international trade arrangements and free trade agreements that spur the use of domestic content, such as CAFTA-DR. These mechanisms, combined with the industry’s history of research-based innovation, are the backbone of the more than 30,000 textile manufacturing facilities both big and small across the United States that employ over 538,000 domestic workers who are responsible for an annual output of over $66 billion. Their combined efforts make the U.S. the third largest exporter of textile-related products globally.
It is also critical that our government agencies expeditiously implement recently adopted legislation governing domestic procurement, such as the Make PPE in America Act. This legislation, which resulted from the harsh lessons learned during the supply chain crises of COVID-19, is designed to reshore and maintain a strategic personal protective equipment (PPE) production chain in the United States by requiring that the Departments of Health and Human Services, Homeland Security, and Veterans Affairs procure only PPE that is wholly made (i.e., 100 percent made in the USA, from the production of the fiber to the yarn, fabric, and finished product) and assembled in the U.S. This important legislation also requires a contract duration for federally procured PPE of no less than two years. Such long-term commitments provide domestic manufacturers with a consistent demand signal that allows them to invest, plan, develop and deliver the medical protective goods our government and nation depend on for safety and security.
It does not take much to see why U.S. textiles are a quintessential story of American spirit and industry. So, as we take this holiday to pause and celebrate our fallen heroes and the freedoms their sacrifices allow us to enjoy, let us also celebrate the rich history of American textiles as a critical part of our national defense. Thanks to manufacturing efforts such as theirs, American warfighters can rely on the highest quality, most sophisticated and dependable military uniforms, protective materials and gear that also drive the innovations for textile products average Americans use every day. By keeping critical supply chains and their research close to home, Americans are guaranteed more sustainable and reliable access to essential products when we need them most.
This Memorial Day, let’s remember the sacrifices of our fellow Americans and enjoy the life they fought to protect. As consumers, let’s prioritize American-made products and, by doing so, support our national defense and invest in our future.
https://textilesinthenews.org/wp-content/uploads/2017/12/logo-header.png00Rebecca Tantillohttps://textilesinthenews.org/wp-content/uploads/2017/12/logo-header.pngRebecca Tantillo2023-05-26 09:26:382023-06-21 12:58:06Memorial Day: Celebrating American Textiles & the U.S. Military
Congressional and federal regulatory scrutiny of Chinese imports entering the U.S. through a trade loophole in U.S. trade law has intensified over the past few weeks, as calls to address and potentially change a little-known legal trade mechanism known as “Section 321 de minimis” continue to gain momentum.
Key Republican and Democratic lawmakers on Capitol Hill, including the House Ways & Means Chairman, the Chairman of the Select Committee on the Chinese Communist Party (CCP) and senators have weighed in on this mechanism.
The de minimis provision of U.S. trade law allows a package of goods valued at $800 or less per person to come into the country duty free everyday through e-commerce. And it is now being aggressively used, letting millions of products into the U.S. market duty free that otherwise would be subject to tariffs, penalty tariffs, taxes and customs inspection.
In 2016, the U.S. government raised the de minimis threshold to $800 while the Chinese government kept its own threshold at meager $8. Since then, e-commerce shipments from China have exploded, reportedly driven in large part by Chinese e-commerce companies and other mass marketers, which have enjoyed meteoric growth.
In fact, U.S. Customs and Border Protection (CBP) estimates that we are on pace to hit over 1 billion in de minimis shipments this year alone, which equates to approximately 2.7 million shipments a day. This is estimated to be the highest spike in de minimis imports—up from 2 million shipments per day in fiscal year 2021. To provide further context to the alarming nature of this exponential growth in de minimis shipments, CBP data estimates that these shipments totaled only 150 million in fiscal 2016—the year Congress increased the de minimis threshold from $200 to $800.
Congressional leaders have recently sounded the alarm about the de minimis mechanism.
Most recently, Sen. Marco Rubio penned an op-ed published in Newsweek on the de minimis loophole that is reportedly allowing goods made with forced labor to enter into the United States unchecked and undermining the Uyghur Forced Labor Prevention Act (UFLPA). Sen. Rubio says it is time to “reevaluate our nation’s de minimis standards.”
Rep. Earl Blumenauer (D-OR), ranking member on the Ways & Means trade subcommittee, who is the lead sponsor of legislation aimed at prohibiting goods from non-market economies that are also on a government trade watchlist–China—from benefiting from de minimis treatment, said at a House Ways & Means hearing on May 9 that he planned to reintroduce his legislation in this session of Congress, and he appeared to gain some support from Chairman Smith.
He said companies use “creative invoicing” on imported products or shipments valued at over the $800 de minimis threshold to take advantage of the duty-free benefits and evade inspection, noting the loophole is “swallowing the exception in ways that are really detrimental to American business and the safety of American consumers.”
And in what could prove to be a defining moment, House Ways & Means Chairman Jason Smith (R-MO) agreed this is a major problem.
The House Select Committee on the Chinese Communist Party (CCP) recently opened a probe into companies and brands at the center of allegations over tainted apparel tied to forced labor in Xinjiang and the reported abuse of the de minimis loophole.
Rep. Mike Gallagher (R-WI), chairman of the committee was recently on major news networks to voice concern about the aggressive use of the de minimis loophole and compliance with UFLPA. See the video clip here:
“The de minimis exception wasn’t supposed to be a loophole for foreign businesses looking to skirt human rights legislation and taxes,” Rep. Gallagher said. “It was meant to minimize the burden on customs agents actually.”
In addition, Democratic leaders from the China Select Committee have made recent comments. See a clip here:
The National Council of Textile Organizations (NCTO) has been highly engaged on these issues for the past four years, raising concerns about the flagrant use of de minimis to facilitate nearly 3 million packages a day to the U.S., allowing tainted and counterfeit apparel and other consumer products to bleed into the U.S. market.
NCTO has testified at congressional hearings and engaged in numerous meetings with lawmakers and U.S. trade officials. She has also raised alarm over the issues in countless interviews and several op-eds.
As Glas notes in her op-eds, “At $800, the United States has one of the highest in the world. While we hold our door wide open, the Chinese government keeps its door virtually shut [to U.S. exports]. An $800 versus $8 limit is hardly a reciprocal arrangement. Instead, we’re unilaterally giving China a massive tax and trade concession. The very least we should do is match China’s threshold.”
Meanwhile, Congress passed, and the President signed into law, the ULFPA in December 2021, there has been global condemnation about the abuse of Uyghur minorities in Xinjiang, China and numerous exposés from prominent news outlets about the use of forced labor to make widely known global apparel brands and labels.
A Bloomberg report seemingly crystallized the connections through laboratory tests conducted by the news outlet that reportedly found garments shipped to the U.S. by Shein were made with cotton from China’s Xinjiang region.
This is clearly a case of two government policies—UFLPA and an outdated de minimis mechanism– working at cross-purposes. We are seeing the unintended consequence of one policy canceling out the other.
The de minimis mechanism is literally undermining efforts to hold China accountable, hurting American manufacturing competitiveness, and stifling the government’s ability to enforce the UFLPA.
Intensifying pressure on the two Chinese e-commerce giants to change their practices is a step in the right direction but to truly address the root cause of the problem, Congress should and can act to close the de minimis loophole.
Last year, the House of Representatives passed legislation with bipartisan support that is designed to close the de minimis loophole, but the legislation to date has stalled in Congress.
Closure of this loophole will prevent companies from overtly circumventing other measures to curb China’s illegal trade practices, including the 301 tariffs and the Uyghur Forced Labor Prevention Act. And help level the playing field for American textile and apparel manufacturers.
https://textilesinthenews.org/wp-content/uploads/2017/12/logo-header.png00Kristi Ellishttps://textilesinthenews.org/wp-content/uploads/2017/12/logo-header.pngKristi Ellis2023-05-16 10:00:112023-05-16 09:03:10Congressional Scrutiny Intensifies Over De Minimis Loophole Bipartisan Concern Mounts
In celebration of Earth Day, which falls on April 22 each year, the National Council of Textile Organizations is sharing media coverage and highlights of sustainable achievements and developments by the American textile and apparel industry thus far in 2023.
The U.S. textile industry, its domestic suppliers, and customers are an important component of the U.S. economy and are found in every region of the country. In addition, the domestic textile industry provides numerous advantages for a greener future, including transparent supply chains with a reduced carbon footprint for American consumers and leading innovations in eco-friendly production and in environmental standards and regulations.
We are happy to share the industry’s achievements for the year thus far. American textiles continue to look for new ways to improve current production standards and invent new solutions for the future. Join us in celebrating these amazing, sustainable achievements by American textiles. Happy Earth Day!
