Vice President Kamala Harris Shines Spotlight on Parkdale Mills Investment at White House Roundtable

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Vice President Kamala Harris highlighted investments in northern Central America and the U.S. by Parkdale Mills and six other companies at a White House roundtable on December 13, part of the administration’s Call to Action to the private sector to promote economic opportunity in the region to address the root causes of migration.

Parkdale Mills, one of the largest manufacturers of spun yarn and cotton consumer products it he world, will make a multimillion-dollar investment in a new yarn spinning facility in Honduras, as well as an additional substantial investment to support existing operations in Hillsville, Virginia. This investment will help customers shift one million pounds of yarn per week away from supply chains in Asia and China and enhance U.S. and CAFTA-DR co-production resilience an dincrease regional product offerings. The new investment will create hundreds of jobs in Honduras and further support hundreds of employees in Parkdale’s Hillsville operations.

Parkdale Chairman and CEO Andy Warlick attended the Vice President’s roundtable and outlined the importance of onshoring and nearshoring, particularly in the midst of a global supply chain crisis that is forcing retailers and brands to recalibrate supply chain strategies to mitigate risk.

The co-production chain with Central America is vital to the employment and investment in the region and the U.S.

Here are some compelling facts:

  • There is $12.5 billion in two-way textile and apparel trade between the U.S. and CAFTA-DR countries, representing $3.5 billion in U.S. textile exports to the region, which resulted in $9 billion in CAFTA-DR textile and apparel exports to the United States, based on pre-pandemic trade flows in 2019.
  • The benefits of this important two-way trading structure help employ 500,000 textile and apparel workers in the CAFTA-DR region and 600,000 workers in the United States.
  • Eighty percent of all U.S. spun yarn exports go to the CAFTA-DR region, while 65 percent goes to the Northern Triangle, three CAFTA countries that Vice President Harris and the administration are examining closely.
  • Two-thirds of U.S. textile exports to the CAFTA-DR region go to the countries of the Northern Triangle. In return, 70 percent of CAFTA-DR textile and apparel exports to the U.S. come from the countries of the Northern Triangle.
  • For every $1 of U.S. textile exports, we receive approximately $2.70 in textile imports from the Northern Triangle.

This supply chain is predicated on the strong yarn forward rule of origin and other textile rules in the CAFTA-DR agreement.

Recently, administration officials from the U.S. Trade Representative’s office and the Vice President’s office met with the U.S. textile industry to reaffirm the importance of rules of origin in nearshoring production chains, helping address labor and environmental challengers and mitigating supply chain risk.

Remarkably, as supply chain issues out of Asia are on the front page, some importers are seeking so- called “relief,” and proposing to weaken the yarn forward rule of origin and other provisions in the agreement. Changing any aspect of the textile rules embedded in the CAFTA-DR agreement would give Chinese yarns and fabrics and those from other countries that are not signatories to the trade pact backdoor access to the CAFTA-DR market and jeopardize hundreds of thousands of jobs that in U.S., CAFTA-DR region and the entire Western Hemisphere.

Warlick highlighted to the vice president the critical co-production chain with the CAFTA-DR region and stressed that this supply chain is quicker, more transparent, more reliable, more sustainable, and free of the forced labor that has been widely documented in Xinjiang, China.

In terms of sustainability alone, a container coming from Central America versus China cuts greenhouse gas emissions by 80 percent. On average, apparel exported from China produces 51.8 kgs of C02 per ton, compared to 18.1 Kgs of CO2 from CAFTA-DR.

Warlick offered a vision for the future of the U.S. industry and this critical co-production chain with Central America and the Western Hemisphere as a whole.

The CAFTA-DR region represents about 7 percent of global apparel and textile imports to the U.S., while China and Asia represent the vast majority of the remaining 93 percent.

By merely doubling the productive capacity and exports from CAFTA-DR, an estimated 2.4 million jobs could be created and billions of dollars in new investment could be unlocked, according to an independent analysis on the economic impact of CAFTA-DR.

NCTO continues to urge retailers and apparel brands to make long-term investments in onshoring and nearshoring production to not only avoid the next breakdown in global supply chains but to invest in strong labor and environmental standards and employment in this hemisphere.

Parkdale’s investment and anticipated investments by other NCTO members underscore how critical and valuable the co-production chain is to the economies of the U.S. and Central America.

This is an exciting time for nearshoring and onshoring these critical production chains. There is a long history in this industry with Central America and the Western Hemisphere and we have never seen an opportunity that is so ripe for these investments and further strengthening our textile and apparel co-production chain.

Vice President Kamala Harris Announces New Investments in Northern Central America Highlighting NCTO Member Parkdale Mills at White House Roundtable

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WASHINGTON—Vice President Kamala Harris announced significant multimillion-dollar investments by Parkdale Mills and six other companies today, as part of the Administration’s Call to Action to the private sector to promote economic opportunity in the region, as her office works to address the root causes of migration.

Vice President Harris, who is overseeing diplomatic efforts with El Salvador, Guatemala, Honduras, and Mexico, announced several private sector commitments to strengthen economic opportunities in the Northern Triangle and will make remarks later today at a White House roundtable, which will include Anderson Warlick, Chairman and CEO of Parkdale Mills. The textile and apparel co-production chain is one of the most essential supply chains for employment and economic development in both the United States and the Northern Triangle region, currently supporting over 1 million jobs in the United States and the Central American region. The Dominican Republic-Central America Free Trade Agreement (CAFTA-DR) and its strong rules of origin are the primary reasons this co-production chain exists, which is seeing significant growth this year.

North Carolina-headquartered Parkdale Mills, one of the largest manufacturers of spun yarn and cotton consumer products in the world, will make a multimillion-dollar investment in a new yarn spinning facility in Honduras and make an additional substantial investment to support existing operations in Hillsville, Virginia. This investment will help customers shift 1 million pounds of yarn per week away from supply chains in Asia and China and enhance U.S. and CAFTA-DR co-production resilience and increase regional product offerings. Parkdale’s announced investment will create hundreds of jobs in Honduras and further support hundreds of employees in Parkdale’s Hillsville operations.

Recently, administration officials from the U.S. Trade Representative’s office and the Vice President’s office met with the U.S. textile industry to reaffirm the importance of rules of origin in nearshoring production chains, helping address labor and environmental challenges and mitigating supply chain risk.

“I would like to sincerely thank Vice President Harris for making this announcement and leading the effort with private industry to create more economic opportunities in northern Central America and the United States,” said Anderson Warlick, Chairman and CEO of Parkdale Mills. “Parkdale’s investments will support good paying jobs in the United States and in the Central American region and significantly increase our extensive product offering and capacity, including the production of sustainable specialty yarns.

Parkdale sees an enormous opportunity for brands and retailers to re-shore and nearshore production supply chains and double the size of U.S.-CAFTA-DR trade, because of the rules of origin in our trade agreement and a shift in sourcing by brands and retailers mitigating their supply chain sourcing risks.  We are excited about what this opportunity means for jobs in the U.S. and the region for this critical production chain and couldn’t be more thrilled to be part of this effort.  We look forward to working with the Vice President and her team on strengthening the textile and apparel production chains in the U.S. and region.”

National Council of Textile Organizations (NCTO) President and CEO Kim Glas, said, “This is an exciting and important announcement by Parkdale and Vice President Harris. Our industry has invested billions of dollars in the U.S. and in the region as a result of the investment-based rules of origin in the CAFTA-DR agreement, which ensures the job benefits of the agreement are reserved for the parties to the agreement.  Additional substantial announcements on further investment in textile and apparel production are expected soon.

As brands and retailers are seeking more environmentally sustainable, vertically integrated, transparent, and quick turnaround supply chains, our collective industries stand ready to work with companies that are seeking to mitigate sourcing strategies as Asian supply chains have faced enormous production constraints.  Further verticalization in the industry, like Parkdale’s announcement today, allows broader product diversification and grows jobs across the textile and apparel production chain.

We are thrilled with today’s announcement because it is a win-win for American and Central American workers and our environment and a huge opportunity to further recalibrate supply chains out of China and Asia. This valuable co-production chain between the U.S. and the CAFTA-DR region accounts for $12 billion in two-way trade and billions of dollars of investment. Significant growth is occurring in our sector and is expected to continue as supply chains continue to recalibrate.  We are delighted about this today’s announcement and appreciate the Administration’s strong support.”

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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 530,000 in 2020.
  • The value of shipments for U.S. textiles and apparel was $64.4 billion in 2020.
  • U.S. exports of fiber, textiles and apparel were $25.4 billion in 2020.
  • Capital expenditures for textiles and apparel production totaled $2.38 billion in 2019, the last year for which data is available.

 

CONTACT: Kristi Ellis

(202) 684-3091

www.ncto.org

 

 

China’s Predatory Trade Practices Hurting U.S. Textile Industry, Western Hemisphere Co-Production Chain

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China’s Predatory Trade Practices Hurting U.S. Textile Industry, Western Hemisphere Co-Production Chain

By Kristi Ellis

China’s unfair trade practices, ranging from rampant intellectual property theft to state sanctioned export subsidies, to the egregious abuse of forced labor in the production of cotton and cotton apparel for well-known global apparel brands and retailers has had a chilling effect on the U.S. textile industry and U.S. trading partners, particularly those in the Western Hemisphere.

The far-reaching impact of China’s illegal practices and its race to dominance as a global supplier of consumer products came under scrutiny at a recent House Ways and Means Trade Subcommittee hearing on Dec. 2, titled “Supporting U.S. Workers, Businesses, and the Environment in the Face of Unfair Chinese Trade Practices.”

NCTO President and CEO Kim Glas, in testimony before the committee, outlined China’s rise to dominance of global textile and apparel production and its adverse impact on the U.S. textile industry, as well as ways to strengthen onshoring and nearshoring of supply chains, and recommendations on the critical policies needed to address these illegal trade practices and rectify inequities in the country’s trade policies.

“China continues to dominate the global textile and apparel market, including our U.S. market through illegal subsidies, rampant IPR theft and other predatory trade practices,” Glas told lawmakers in her opening remarks. “This has cost hundreds of thousands of domestic jobs here in the United States and undermined critical production chains like personal protective equipment (PPE).”

“If I were to offer one overarching recommendation today, we need to hold China accountable and ensure our trade policies are keeping pace to address the rapidly emerging predatory challenges we are facing from China and others,” she added.

Rep. Earl Blumenauer (D-Ore.), chairman of the powerful trade subcommittee, said in his opening remarks, “Instead of joining other market-based world economies, China has doubled down on its state-driven economic model.  Economists now describe this phenomenon as the ‘China shock,’ which has had devastating and sustained impacts on U.S. workers and businesses across our country,” Blumenauer said.

“More broadly, China continues to demonstrate that it refuses to play by the rules.  China will exploit loopholes wherever they exist.  We’ve given too much of a free pass to China over the years – it’s now time to take these issues seriously and take a more aggressive approach,” he stressed.

Glas said China’s “abusive environmental and labor record is on full display in our sector and has been well documented.”

Egregious & Illegal Use of Forced Labor in China

China makes up 44 percent of U.S. imports of textile and apparel products, she noted. One in five garments coming into the U.S. from China are made with forced labor from Xinjiang “with the worst human rights abuses imaginable,” she noted.

Between 2017-2019, the Chinese government has forcefully transferred an estimated 800,000 to 1.8 million Uyghur Muslims from their homes in Xinjiang to detention centers and factories throughout China forced to manufacture products for international sale under forced labor conditions, according to numerous reports and international and domestic news outlets, Glas said in written testimony submitted to the committee.

Given that 20 percent of global cotton production is sourced from Xinjiang, tainted apparel and textiles made with forced Uyghur labor is a serious problem for the U.S. and the world.

U.S. Customs and Border Protection (CBP) issued a Withhold Release Order (WRO), effectively a ban on cotton and cotton products coming from the Xinjiang region in China, but the agency lacks the resources to inspect and stop a majority of goods from Xinjiang from entering the U.S. market, Glas told the committee.

“These items are bleeding into our supply chains and making it to our store shelves and into our closets,” Glas noted in her opening remarks.

Section 321 De Minimis Loophole

“Some of these products are making their way with the press of a button to our doorstep using the Section 321 de minimis loophole that allows these goods to come in duty free—not just evading China 301 duties, but all duties—from China and elsewhere with little scrutiny by U.S. Customs on these products,” she continued.

The United States provides a duty exemption for goods valued at less than $800 in retail value if imported by one person on one day.

Of note, the de minimis exemption was raised from $200 in 2016 under the U.S. Customs reauthorization legislation.  The current application of de minimis provides exemptions on base MFN tariffs, as well as Section 301 tariffs, such as those currently in place against imports from mainland China. Use of this exemption has skyrocketed alongside the growth of direct‑to‑consumer e‑commerce, which has further accelerated due to the COVID‑19 pandemic.

De Minimis exemptions are a loophole that allows tainted goods to be imported into the U.S. market duty free virtually unchecked and undermines carefully constructed textile and apparel rules of origin in CAFTA-DR and other free trade agreement and trade preference partners.

Blumenauer took note of Glas’ remarks and called out her reference to the de minimis problem.

“Ms. Glas has noted the example of Shein [a Chinese e-commerce conglomerate that imports billions of dollars of apparel to the U.S.]. This Chinese company has developed a business model to exploit the de minimis provision in U.S. law to avoid paying any costs or go through oversight at the U.S. border, all of which undercuts U.S. companies playing by the rules,” Blumenauer said.

“Shein is also part of the Chinese textile industry that benefits from the deplorable treatment and forced labor of Uyghurs and other minorities in the Xinjiang region of China.  Lack of oversight at U.S. borders makes it even more difficult for CBP to intercept these shipments,” he noted.

Blumenauer pointed to a roundtable he attended on the issue, nothing that he was made aware of the fact that some 2 million packages are shipped into the U.S. each day under de minimis waivers. He also noted that one witness suggested as many as 6 million packages per day are coming into the U.S. market under the Section 321 waivers.

“These issues with de minimis and forced labor are key areas of importance for me and ones that I intend to legislate on in the coming months,” Blumenauer said.

Rep. Danny Davis (D-Ill.) asked the hearing witnesses what they considered would be the most practical end expeditious solution to addressing China’s illegal practices.

“In terms of things in our trajectory that we can get done very quickly, closing the de minimis loophole is one and effectively banning the cotton and cotton products coming from Xinjiang,” Glas said. I do not believe we have given CBP the resources to effectively administer the WRO. We should be holding daily press conferences on stopping shipments coming in because that will help recalibrate supply chains both here to the U.S. and to our Western Hemisphere partners.”

China’s Predatory Practices Hit CAFTA-DR Countries

“These predatory practices have not only harmed U.S. manufacturers and workers, but also drastically impacted our valued political and economic allies in the Western Hemisphere,” Glas said.

“For example, the CAFTA-DR-U.S. co-production chain for textile and apparel supports over 1 million jobs and has been a critically important and a deeply economically impactful agreement, despite the headwinds from China’s increased access to our markets during the agreement’s existence,” she said.

The main driver behind the stability in the face of the China juggernaut is the yarn forward rule of origin, Glas said.

“This unique investment-based rule ties lucrative duty-free access to the U.S. market and our consumers to ensure investment in yarn, fabric and cut and sew production. Simply put, it means the agreement requires the signatories of the agreement gain the job benefits of the agreement.”

“Onshoring and nearshoring are happening. Key CAFTA-DR countries have seen exports up anywhere from 33 to 56 percent, outpacing major Asian exporters, and more investment in yarn, fabrics and apparel production will be announced soon,” she added.

Glas told the committee that apparel brands and retailers importing product to the U.S. from China are seeking “so-called relief [such as weaking the rules of origin in CAFTA-DR] to give Chinese yarns and fabrics and other countries that are not signatories of the agreement, backdoor access to the CAFTA-DR market.”

“These Trojan Horse ideas must be rejected out of hand because they hurt U.S. jobs and those in the region and reward other countries,” she noted.

In one of the liveliest exchanges during the question-and-answer session with the committee, Rep. Tom Suozzi (D-NY) called on retailers and apparel brands, some of whom have complained that the ban on cotton and cotton products from China is raising prices on imported goods to the U.S. and said they should shift more production to the U.S. and Western Hemisphere.

“The [U.S.] textile industry is very concerned about what China is doing. We’ve gone to China for cheaper goods,” Suozzi said.

He said the U.S. should close the U.S. market to imported goods from the Xinjiang region, something that could be helped by passage of the Uyghur Forced Labor Prevent Act (which the House passed last week).

“We should say that any goods coming from the Xinjiang region are presumed to be made with forced labor,” Suozzi said.

“Concerns from industry and others that this will make the cost of T-shirts and pants go up and be passed on to the consumer, my initial reaction to that is: “It’s too damn bad.”

“We have to hold them accountable for the way they are treating human beings in their country,” Suozzi added.

Glas agreed with Suozzi’s recommendations, noting that she is a commissioner on the U.S. -China Economic and Security Review Commission, and pointing to a recommendation from the commission this year to ban all products coming from Xinjiang for importation to the U.S. market.

“Seventy percent of U.S. textile, fiber, yarn and fabrics go to our Western Hemisphere trading partners,” Glas said. “We have one of the best cotton growing industries in world. There is transparency in our supply chains here and in the hemisphere because we have a strong rule of origin under our free trade agreements.”

“We are already starting to see opportunities coming to our hemisphere. Trade is up from some of the Northern Triangle countries by 56 percent over the last two years because Asian supply chains are breaking down,” Glas added. I do think there are retailers who are trying to de-risk out of Asia given the pervasiveness of the Xinjiang cotton issues. Our market is open here in the United States and we’re open for business in the Western Hemisphere. This is a huge opportunity to onshore and nearshore these critical production chains.”

Glas outlined key policy recommendations to the committee, including:

  • Enact tax incentives and other targeted critical investments to strengthen Western Hemisphere trade relationships and re-shore manufacturing
  • Close the Section 321 De Minimis Tariff Loophole
  • Step up enforcement of forced labor of Uyghurs and others in the Xinjiang Uyghur Autonomous Region (XUAR)
  • Firmly maintain Section 301 penalty duties on China for finished textiles and apparel products
  • Immediately pass the MTB to help manufacturers with a limited list of critical inputs not made in the U.S. and review/close the mechanism in the MTB renewal which allows for finished products
  • Strengthen buy-American practices for PPE and other essential products
  • Block expansion of the Generalized System of Preferences (GSP) to include textile and apparel products
  • Use trade enforcement in free trade agreements to mitigate transshipment schemes by unscrupulous importers seeking to illegally circumvent duties

Contempora Fabrics: A North Carolina Circular Knitter Well Positioned for Rising Demand in Sustainable, American-Made Products

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As brands and retailers, caught in a global supply chain squeeze, scrutinize their supply chains and explore new strategies based on onshoring and nearshoring, North Carolina textile companies like Contempora Fabrics are beginning to see rising demand for sustainable, American-made textiles.

Based in Lumberton, N.C., Contempora is a manufacturer of circular knits specializing in both coarse and fine gauge knits predominantly for the fashion apparel, performance sportswear and workwear markets.

Contempora was founded in 1972 by Lacy C. Nance to produce fine gauge interlock and single knit fabrics. In 1984, 40 percent of the company was purchased through an Employee Stock Ownership Plan (ESOP) and the company became 100 percent ESOP in 1988.

Today, Contempora Fabrics operates 175 machines in a 150,000 square foot facility on 29 acres and is known for a versatile product mix and capacity to manufacture approximately 2 million pounds of fabric each month.

On a weekly basis, Contempora produces 450,000 pounds of fabric, 80 percent of which is polyester and 20 percent of which is cotton blend.

Its knit fabric production is heavily concentrated in the team sports and performance markets and is used in a wide variety of products, ranging from jersey knit T-shirts to mesh fabrics in uniforms used in the MLB and NBA, to heavy weight fleeces.

Contempora works with several well-known performance gear, workwear and apparel companies.

Contempora President Ron Roach says apparel accounts for 90 percent of the company’s polyester knit fabric business, but he says the company is expanding its business into new markets, including industrial and automotive and potentially furniture.

As the company continues to deepen its product offerings, the demand for American-made, environmentally friendly fibers, yarns, fabrics and apparel continues to rise.

Sustainability is in Contempora’s DNA

Contempora has reached an impressive sustainable milestone. To date, the company has prevented 63 million plastic bottles from going to landfills by purchasing and using recycled fibers from Unifi Inc.’s REPREVE® brand, says Hannah Rich, product development engineer at Contempora.

She says that customers are seeking to switch more from virgin polyester yarns to recycled yarns though the cost differential is still a barrier.

Of the 450,000 pounds produced each week, 50,000 pounds contains recycled poly yarns and 200,000 pounds uses 100 percent virgin poly.

Recycled poly is 15-20 percent more expensive than virgin polyester, she notes.

In addition to rising customer demand for recycled products, Contempora has invested in reducing its own environmental footprint, says Contempora President Ron Roach.

“We’ve spent the last 10 years updating all of our lighting systems so that they use less wattage and we have spent a tremendous amount of money in the last five to six years on new equipment that uses less electricity,” stresses.

For the year to date, Contempora has recycled over 123,000 pounds of cardboard, more than 257,000 pounds of cardboard yarn cones and over 13,000 pounds of plastic, for a total of over 394,000 pounds, or 197,000 tons.

“The incredible advantage of using a sustainable product line is that it is all very traceable. We can verify everything. We can trace our product all the way back to the beginning to ensure that it was produced in the sustainable way we are claiming,” he says.

Roach says he hopes brands and retailers appreciate the investment in sustainable practices as well as the resiliency of the supply chain in the face of a major shock like that of the COVID-19 pandemic and shift more sourcing to the United States and the Western Hemisphere, the textile industry’s largest export market.

“We are definitely hoping that retailer and brands are coming to the conclusion that most of us have known for a long time—the cheapest price is not necessarily the best cost in the long run,” Roach notes.

“With the severe shortages of personal protective equipment (PPE) that we saw during the onset of the COVID pandemic, we learned how our dependence on Asia really hurt this country. The U.S. textile industry’s response was heart felt and really demonstrated our industry’s ability to come together and help solve the PPE shortages.”

Onshoring

Business for U.S. knit suppliers has been strong, Roach notes, despite the fact that most of the apparel manufacturing base moved offshore decades ago.

But there has been an upheaval in the global supply chain that companies are watching closely.

A confluence of events, including the supply chain crisis associated with the pandemic, Section 301 tariffs imposed on finished apparel and textile imports from China and a U.S. ban on cotton and cotton products from the Xinjiang region of China linked to the use of forced labor of Uyghur minorities, has led to a shift in global sourcing.

While Roach notes that he has not seen a rush to onshore on the part of retailers and brands, he says there have been numerous conversations “about putting up facilities in the U.S. and we are anxious to see where that goes.”

He pointed to a new program that Contempora is staring with a major apparel brand that will be made strictly in the U.S.

Additionally, Walmart, the nation’s largest retailer, continues to explore U.S. suppliers and recently participated in the Americas Apparel Producers’ Network (AAPN) Carolina Mill Tour in October. Contempora was one of the four stops, a reported by eTextileCommunications.

This year, Walmart announced a $350 billion Made in USA Lighthouse initiative aimed at strengthening its commitment to U.S. jobs and communities. The 10-year project aims to help identify and overcome top-down barriers to U.S. production.

“I am very encouraged by the Walmart Carolina tour It went well and we are anxious to see where it goes,” Roach notes. “I think it is a very good sign when you have the largest retailer in the country look at making a commitment and I hope that others will also take that same look.”

Nearshoring-Western Hemisphere

Roach says that he expects the Western hemisphere to be a “big, big play” in the coming months.

Central America is Contempora’s largest export market, accounting for 80 percent of the company’s exports.

According to recent trade data, the Western Hemisphere marked a dramatic rebound in the first half of 2021, driving a 50 percent surge in U.S. apparel imports, as global sourcing shifts and pressure on China forced retailers and brands to continue diversifying and consider nearshoring more production to take advantage of the benefits of our free trade agreements (FTAs) in the region.

For the year to date through September, apparel imports from the Western Hemisphere (largely comprised of U.S. textile components) jumped 43 percent to $10.3 billion compared with the year-ago period, according to new data from the Commerce Department’s Office of Textiles and Apparel (OTEXA).

Roach notes that he expects to see the Western Hemisphere gain the most from sourcing shifts by retailers and brands, a key reason why he says maintaining strong textile rules in the U.S. free trade agreement with Central America is critical.

“I know there is a lot of talk about reopening CAFTA-DR (the Dominican Republic-Central America Free Trade Agreement) but that would be a complete disaster,” he adds. “The yarn forward rule has helped maintain business and a strong coproduction chain with Central America, and the administration supports the status quo and is not looking to reopening it, based on reports from a recent roundtable.”

Labor Shortage Challenge

As is the case with all industry sectors across the U.S., the textile industry has been struggling with severe labor shortages that have idled some capacity and led to lost business opportunities.

But the business is there, Roach stresses.

“In today’s world, everyone is busy, whether on the yarn side, the fabric mill side or the apparel side,” Roach says. “The biggest problem we are all having up and down the supply chain are these labor shortages.”

He notes it affects the entire domestic supply chain from getting raw materials for production to shipping fabrics to dye houses.

“The key is trying to tap into what today’s workers are looking for,” Roach notes. “I don’t think we will ever go back to the days before pre-COVID. We have to work together to figure out what happened and then find ways to address this. The person who figures that out will be the winner.”

Roach is trying one new strategy. In addition to taking the usual steps to hire and retain workers, he says he has applied to the HB-2 Visa program and is trying to hire 20-30 workers from El Salvador on 10-month work visas, though the process has taken longer than he anticipated.

“There is enough business in the U.S. We just have to figure out how to get enough employees to run it,” Roach notes.

 

NCTO President & CEO Kim Glas Testifies on Supporting U.S. Industry in Face of Unfair Chinese Trade Practices at House Ways and Means Trade Subcommittee Hearing

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WASHINGTON, DC—NCTO President and CEO Kim Glas is testifying today at a hearing on “Supporting U.S. Workers, Businesses, and the Environment in the Face of Unfair Chinese Trade Practices” before the House Ways and Means Trade Subcommittee at 10:00 a.m. ET.

In written testimony submitted to the committee, Glas outlines China’s rise to dominance of global textile and apparel production and its adverse impact on the U.S. textile industry, details ways to strengthen onshoring and nearshoring of supply chains, and provides recommendations on the critical policies needed to address these illegal trade practices and rectify inequities.

“China holds the dubious distinction of being the world’s leading purveyor of illegal trade practices that are designed to unfairly bolster a blatantly export-oriented economy,” NCTO President and CEO Kim Glas says. “These predatory practices take many forms, from macroeconomic policies that grant across-the-board advantages to their manufacturers, to industry specific programs intended to dominate global markets in targeted areas. The U.S. textile industry has been a longstanding victim of China’s predatory export practices.”

“China’s virtually unlimited and unrealistic pricing power coupled with its subsidies and lack of enforceable labor and environmental standards strips benefits and undermines policy objectives throughout the U.S. free trade and preference program structure,” Glas further notes.

“A program of maximum pressure must be developed and fully enforced to reconfigure textile and apparel sourcing patterns that currently place an unhealthy and heavily weighted dependance on China,” Glas adds. “With a strong trade policy holding China accountable, the opportunities are ripe to unlock further domestic and regional investment to bolster this critical textile and apparel production chain because of the important rules of origin for this sector.  We can nearshore more production, help address the migration crisis, and assist in addressing the urgent issue of climate change and create a win-win-win for workers in the United States, workers in the region, and consumers.”

Glas outlines key policy recommendations to the committee, including:

  • Enact tax incentives and other targeted critical investments to strengthen Western Hemisphere trade relationships and re-shore manufacturing
  • Close the Section 321 De Minimis Tariff Loophole
  • Step up enforcement of forced labor of Uyghurs and others in the Xinjiang Uyghur Autonomous Region (XUAR)
  • Firmly maintain Section 301 penalty duties on China for finished textiles and apparel products
  • Immediately pass the MTB to help manufacturers with a limited list of critical inputs not made in the U.S. and review/close the mechanism in the MTB renewal which allows for finished products
  • Strengthen buy-American practices for PPE and other essential products
  • Block expansion of the Generalized System of Preferences (GSP) to include textile and apparel products
  • Use trade enforcement in free trade agreements to mitigate transshipment schemes by unscrupulous importers seeking to illegally circumvent duties

Please view the full written testimony by NCTO President and CEO Kim Glas here.

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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 530,000 in 2020.
  • The value of shipments for U.S. textiles and apparel was $64.4 billion in 2020.
  • U.S. exports of fiber, textiles and apparel were $25.4 billion in 2020.
  • Capital expenditures for textiles and apparel production totaled $2.38 billion in 2019, the last year for which data is available.

DOWNLOAD RELEASE

Kristi Ellis

Vice President, Communications

National Council of Textile Organizations

kellis@ncto.org  |  202.684.3091