NCTO Issues Statement on Biden Administration’s Section 301 Tariff Report, Maintaining Penalty Tariffs on Finished Textiles and Apparel Imports
May 14, 2024
WASHINGTON, DC—National Council of Textile Organizations (NCTO) President and CEO Kim Glas issued a statement today regarding the Biden administration’s announcement on the U.S. Trade Representative Office’s four-year statutory review of Section 301 tariffs.
As part of the USTR’s final report, the administration will maintain penalty tariffs on finished textiles and apparel imports from China and increase tariffs on certain imports of personal protective equipment (PPE).
Statement by NCTO President and CEO Kim Glas
“It was critical that the administration maintain penalty duties on finished textiles and apparel imports from China and increase tariffs on certain imports of personal protective equipment (PPE), and that was an appropriate and foundational decision. However, we believe an opportunity was missed to address China’s continued dominance in the U.S. textile market and to counter the devastating impact of its predatory and illegal trade practices on domestic textile manufacturers and workers.
“Given rapidly deteriorating market conditions, we ask the administration to help level the playing field to further increase tariffs on finished textile and apparel and certain inputs, as the industry is facing severe economic headwinds due to China’s dumping of products on our market that are flooding the world stage and displacing critical U.S. investments.
“The domestic textile and apparel industry is an integral part of the military and public health industrial base, and a key supplier of critical PPE items that are essential to our national health security. Regrettably, China’s unchecked foreign predatory trade practices coupled with a lack of customs enforcement and misguided trade policy proposals have created an unstable market dynamic that is threatening the future of domestic textile manufacturing.
“The flood of under-valued, subsidized and illegal imports from China is undercutting the competitiveness of domestic textile manufacturers, 17 of which have closed in the past several months – including three announcements over the last few days. Furthermore, we need the administration and Congress to immediately close the de minimis loophole that is further undermining all trade enforcement efforts and astonishingly rewarding the Chinese with duty free access to the U.S. market regardless of 301 tariffs.
“While the Section 301 tariffs on finished textile and apparel imports help to partially counter China’s unfair trade advantages, subsidized Chinese textile and apparel inputs, including those made from slave labor in Xinjiang where 20 percent of global cotton is produced and where man-made fibers like rayon have been tied to forced labor, continue to undermine this vital industry.
“Furthermore, China has been dropping its prices since the tariffs took effect to convince sourcing agents to stay loyal despite the risks. According to U.S. import data, the dollar value per square meter equivalent of textiles and apparel from China fell an astounding 34 percent over from $1.21 per SME in 2018 to $0.80 for the most recent 12-month period ending March 2024.
“According to the U.S. Department of Commerce, China has increased its textile and apparel shipments to the U.S. by a stunning 20.5% during the first quarter of 2024. Over the same period, our most critical coproduction partners in the United States-Mexico-Canada Agreement (USMCA) and Dominican Republic-Central America- Free Trade Agreement (CAFTA-DR) regions are down 45.2% and 4.6% respectively. The Western Hemisphere is down an incredible 31.9% so far this year. The message is clear: China continues to take Western Hemisphere market share as they flood the world stage directly and indirectly, with subsidized and often illegal exports of textile and apparel products.
“We commend the administration for substantially increasing tariffs on certain Chinese imports, including electric vehicles, solar products and batteries, as part of their review. This moment calls for an increase in tariffs on finished textile and apparel imports. We recognize there are many sectors suffering at the hands of China’s illegal and predatory activity, and the substantial increase in penalty tariffs on these imports by the administration was warranted—just as they are in the U.S. textile sector.
“To have maximum and meaningful impact for the vital American textile industry, the administration must consider dramatically increasing tariffs on finished textile and apparel imports from China, similar to the levels announced in certain sectors today. Ramping up tariffs on finished textile and apparel imports would help equal the playing field and restore this industry’s competitiveness and address China’s predatory behavior destroying critical jobs in this strategic industry that supplies lifesaving products for our U.S. military and our PPE industrial base.”
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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 501,755 in 2023.
- The value of shipments for U.S. textiles and apparel was $64.8 billion in 2023.
- U.S. exports of fiber, textiles and apparel were $29.7 billion in 2023.
- Capital expenditures for textiles and apparel production totaled $2.27 billion in 2021, the last year for which data is available.
CONTACT:
Kristi Ellis
Vice President, Communications
National Council of Textile Organizations
kellis@ncto.org | 202.281.9305
