Textile Leaders Call for Ending de Minimis, Shifting Supply Chains to Western Hemisphere

Representatives from the domestic textiles industry testified at an Office of the U.S. Trade Representative hearing May 2 regarding ways to promote supply chain resilience, especially after many were disrupted by the COVID-19 pandemic (see 2404290057).

Several of the representatives discussed the particular challenges faced by the textile industry, which, as Julia Hughes from the U.S. Fashion Industry Association argued, often practically requires multicountry supply chains.

All of the representatives said they support measures to diminish the impact of Chinese economic textile policies, though they disagreed on some of the specifics, such as increasing supply chain transparency by maintaining free trade agreements or ramping up enforcement of tariffs and trade penalties. Multiple organizations specifically endorsed a bill currently advancing through Congress to reduce nonmarket countries’ access to de minimis (see 2404300040).

Kimberly Glas, president and CEO of the National Council of Textile Organizations, said that closing the de minimis loophole is her organization’s top recommendation to USTR.

Of the 4 million packages entered into the U.S. each day under de minimis, about half are textile and apparel goods, she said. Emily Stochl, advocacy manager of the fashion activism group Remake, agreed, noting the loophole has been “aggressively exploited” by Chinese companies such as Shein and Temu, which, she said, together send up to 600,000 packages to the U.S. every day.

Goods shipped de minimis also do greater environmental damage, as shipping large numbers of single packages is much more carbon-intensive, said Timothy Voit, vice president of strategic and international sales for Thomaston Mills. And, he said, they have “only added to the extreme stress” felt by the remaining domestic apparel manufacturers after the pandemic.

Several industry representatives also said that they want the administration to promote moving and maintaining supply chains with free trade agreement partners and with countries closer to home, such as Mexico.

Glas called a greater focus on the Western Hemisphere “essential,” saying that her industry has invested $20 billion in Mexico and Latin America over the last 10 years. She noted that the yarn forward rule, which requires every part of a piece of apparel starting with the yarn to have been made in the U.S. or an FTA partner, was "absolutely critical" to those investments.

That level of investment was why Vice President Kamala Harris once noted that the apparel industry could help "to stabilize Central America," Glas said. However, she said that the downward price pressure from China and other Asian countries has caused destabilization "in recent months."

And those countries “are also the victims of the Chinese and other predatory trade practices in this sector,” she said.

Nate Herman, vice president of the American Apparel and Footwear Association, disagreed, saying that his organization has "never seen any proof" of Chinese mistreatment of those countries, nor of transshipment of products made with forced labor from them to the United States.

Herman said that supply chain resiliency requires supporting free trade allies. He argued, however, that FTAs have to be "modernized" by loosening restrictions such as the yarn forward rule.

Working with FTA allies also gives the U.S. better leverage to promote increased environmental and labor standards in the textiles and apparel sectors, said Jonathan Gold, vice president of supply chain and customs policy at the National Retail Federation.

Too much reliance on Chinese textiles could even endanger the U.S. defense industry, Voit and Glas said. Voit said that the U.S. is significantly limited in its ability to manufacture soft goods for national defense or the consumer market.

“Production has been instead concentrated in often adversarial, high-carbon intensity countries with flimsy environmental and labor standards,” he said. “Factory and job losses in our domestic manufacturing center have intensified, and vulnerabilities to critical supply chains are multiplying in the current environment.”