NCTO Raises Serious Concerns over the Administration’s Plan to Impose Tariffs on Mexico

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WASHINGTON, DC – Kim Glas, President & CEO of the National Council of Textile Organizations (NCTO), issued the following statement today in response to the administration’s decision under the International Emergency Economic Powers Act to assess penalty duties on Mexico as an attempt to address the growing immigration dispute on the U.S. southern border.  The proposed 5% increase would begin on June 10 and incrementally increase to 25%, if the dispute is not resolved.

The magnitude of the trading relationship with Mexico is significant for the U.S. textile industry, representing $12.2 billion in two-way textile and apparel trade in 2018. The U.S. textile industry alone exported $4.7 billion in yarn and fabrics to Mexico last year and had a net export surplus of $3.8 billion.

As a result, Mexico is the single largest market for U.S.-made textile exports.

“We are very concerned about the impact these proposed tariffs would have on a critical and integrated supply chain for the U.S. and Mexico textile and apparel industries. Under the NAFTA agreement, the U.S. has benefited as a result of strong rules of origin that require the use of regional yarns and fabrics. As a result, the U.S. industry has made significant investment—$22.8 billion from 2006 to 2017—to help grow the manufacturing of fiber, yarns, and fabrics in the United States. NCTO supports the passage of the pending U.S.-Mexico-Canada Agreement (USMCA) because it is a critical trade agreement that will strengthen the industry’s supply chain representing approximately $20 billion in three-way trade,” Glas said.

“Adding tariffs to Mexican apparel imports, which largely contain U.S. textile inputs, would significantly disrupt this industry and jeopardize jobs on both sides of the border,” Glas said. “And as a result, it will accelerate substantially the immigration issues the administration is seeking to address.”

“In addition, this tariff increase would give a significant competitive advantage to China, which already accounts for about 38% of apparel and textile imports to the U.S.” Glas added. “In fact, if this increase goes forward it will drive business back to China at a time when the administration is trying to crack down on intellectual property abuses and make systemic trade reforms that have undermined U.S. manufacturing industries for decades. This proposal is extremely concerning to U.S. textile manufacturers and we will do all we can to amplify these concerns with the administration and members of Congress.”

Mexico and Canada together are the U.S. textile industry’s two largest export markets worldwide. In 2018, the U.S. ran a combined $3.8 billion surplus in textiles and apparel with those two North American Free Trade Agreement trading partners.

NCTO is a Washington, DC-based trade association that represents domestic textile manufacturers, including artificial and synthetic filament and fiber producers.

  • U.S. employment in the textile supply chain was 594,147 in 2018.
  • The value of shipments for U.S. textiles and apparel was $76.8 billion in 2018.
  • U. S. exports of fiber, textiles and apparel were $30.1 billion in 2018.
  • Capital expenditures for textile and apparel production totaled $2.0 billion in 2017, the last year for which data is available.

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CONTACT: Kristi Ellis

(202) 684-3091

www.ncto.org

 

NCTO Comments on 301 Tariff Increase; Renews Call for Tariffs on Textile and Apparel End Items and Need for Exclusion Process

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May 8, 2019

WASHINGTON, DC – The National Council of Textile Organizations (NCTO) appreciates the Trump administration’s action to crack down on unfair trade practices from China through the Section 301 mechanism.

A Federal Register notice, set to be published on Thursday, states the administration’s intent to raise tariffs on $200 billion of imported Chinese goods from 10 percent to 25 percent on May 10. NCTO urges the administration to ensure an expeditious and transparent exclusion process and the inclusion of finished apparel and textile end products to this remedy.

“It’s long past time we address China’s unfair trade practices, particularly relating to intellectual property abuses,” said NCTO President and CEO Kim Glas.

“However, we remain very concerned that finished Chinese textile home furnishings and apparel are not on the administration’s retaliatory tariff list,” Glas said. “Chinese imports of finished goods into the U.S. market have the most significant impact on domestic textile and apparel production, investment and jobs. In order to address the crisis, we need to get to the very heart of the problem.”

According to U.S. government data, China predominantly ships end items to the U.S. versus intermediate inputs. Finished apparel, textile home furnishings and other made-up textile goods equate to 93.5 percent of U.S. imports from China in our sector, while fiber, yarn, and fabric imports from China represent only 6.5 percent.

“NCTO also remains seriously concerned that some inputs critical to the competitiveness of U.S. textile manufacturers remain on the retaliation list and will now face a 25 percent tariff. Duty increases on inputs alone, without addressing the growing problem of end products can raise the cost of U.S. textile manufacturers trying to compete with like Chinese products,” Glas said. “We are pleased that the administration intends to announce an exclusion process and we urge that the process be fair, transparent, and expeditious.”

For more on this issue, see: NCTO Testimony to the Section 301 Committee on August 20, 2018

NCTO is a Washington, DC-based trade association that represents domestic textile manufacturers, including artificial and synthetic filament and fiber producers.

  • U.S. employment in the textile supply chain was 594,147 in 2018.
  • The value of shipments for U.S. textiles and apparel was $76.8 billion in 2018.
  • U.S. exports of fiber, textiles and apparel were $30.1 billion in 2018.
  • Capital expenditures for textile and apparel production totaled $2.0 billion in 2017, the last year for which data is available.

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DOWNLOAD RELEASE

CONTACT: Kristi Ellis

(202) 684-3091

www.ncto.org