WASHINGTON, D.C. — The National Council of Textile Organizations (NCTO), representing the full spectrum of the U.S. textile industry from fiber, yarn, and fabric production to finished sewn products, has issued a statement following the administration’s latest Section 301 forced labor actions.
The administration announced it will impose Section 301 tariffs on goods originating from 60 economies for failing to effectively implement and enforce prohibitions on imports produced with forced labor. Under the decision, a textile mechanism will provide relief from Section 301 duties for textile and apparel imports from Bangladesh, Cambodia, Indonesia, and Malaysia, contingent on those nations’ imports of U.S. cotton and textiles through tariff-rate quotas. However, the administration chose not to exempt textile inputs and machinery unavailable domestically, which NCTO notes are critical to onshoring the U.S. supply chain away from countries failing to combat forced labor.
Statement from NCTO Leadership on Tariffs and Trade Impact
NCTO President and CEO Kim Glas highlighted the severe challenges facing domestic production, pointing out that no sector has suffered more from forced labor than the U.S. textile industry, which currently employs 453,000 workers and has seen 41 plants close over the past two-plus years.
Glas expressed strong concern that the proposed textile mechanism from the United States Trade Representative (USTR) will harm domestic manufacturers. She stated that tariff benefits provided to Asian nations will come at the direct expense of U.S. textile manufacturers and the Western Hemisphere, which serves as the destination for 70 percent of total annual U.S. textile and apparel exports. While the policy aims to adjust duty structures, Glas cautioned that these tariff benefits create an uneven playing field.
Market Share Trends and Regional Supply Chain Dynamics
Because Western Hemisphere supply chain networks compete directly against Asian suppliers, any market shift away from the region reduces export opportunities for U.S. manufacturers and causes further domestic contraction. According to NCTO, U.S. apparel imports from major Asian supplier countries utilizing textile components from China, including Bangladesh and Indonesia, experienced double-digit growth last year.
Since 2019, Asia has expanded its U.S. market share from 77 percent to 79 percent, while the Western Hemisphere’s share contracted from 16 percent to 12 percent. Glas warned that removing Section 301 duties on apparel imports from Asian nations will further accelerate these trendlines. She added that cotton produced with Uyghur forced labor in Xinjiang, China remains widespread across global supply chain networks, inflicting economic damage on the domestic industry.
UFLPA Enforcement and Trade Agreement Exemptions
NCTO urged the administration to focus on stepping up enforcement of the Uyghur Forced Labor Prevention Act (UFLPA), noting that enforcement metrics have declined across every measure. NCTO welcomed the administration’s decision to exclude qualifying apparel and textile goods entering duty-free under the United States-Mexico-Canada Agreement (USMCA) and the Dominican Republic-Central America Free Trade Agreement (CAFTA-DR) from the Section 301 tariffs.
However, Glas called the administration’s proposed textile mechanism a step backward. She reiterated that including raw cotton in the mechanism creates an offshoring incentive by lowering Asian apparel import costs, artificially driving up cotton prices for domestic mills, and providing a tariff reward to Asian manufacturers. She refuted claims that the mechanism would expand exports of U.S. yarns and fabrics, citing Asia’s chronic reliance on subsidized inputs.
Industry Alternative Proposal and Next Steps
In response, NCTO and apparel and retail sector leaders united to present an alternative mechanism proposal to USTR. The proposal aims to potentially double U.S. textile exports, foster growth and investment across the Western Hemisphere supply chain, and address ongoing forced labor concerns. NCTO pledged to continue working with the administration during implementation to push for solutions that reshore domestic manufacturing and stabilize regional supply chains.
