Latest news with #NCTO
Yahoo
03-07-2025
- Business
- Yahoo
NCTO Urges House Leaders to Preserve Provision Ending De Minimis in Updated Megabill
Senate Republicans advanced the One Big Beautiful Bill act Tuesday afternoon, with Vice President JD Vance casting the tie-breaking vote in favor of the bill. The megabill will now return to the House of Representatives for a vote. Senate members made some changes to the bill—including striking the controversial 10-year moratorium on state AI regulation—which means it now requires a new vote from House leaders. More from Sourcing Journal Trump Announces 'Great Deal of Cooperation' With Vietnam, Lowering Tariff Rate China Warns Nations Not to Sign Trade Deals With US at Its Expense Asia-to-North America Air Cargo Demand Plunges 10.7% After De Minimis Suspension The National Council of Textile Organizations (NCTO) lauded Senate leaders Tuesday for choosing to keep a provision focused on ending de minimis in the bill. The section in question would see the U.S. permanently collapsing the de minimis provision by the middle of 2027. Kim Glas, president and CEO of the NCTO, called on House politicians to keep up the Senate's momentum, noting that doing so 'would help rebalance the playing field for the domestic textile industry.' 'We are urging congressional leaders to ensure inclusion of this critical provision in the final version of the reconciliation bill this week, which would bring us one step closer to marking a significant milestone for the U.S. textile industry and a broad coalition of organizations dedicated to advocating for ending this destructive loophole,' she said in a statement. De minimis has long been used to ship low-value goods into the U.S. without duties, enabling easy access to the U.S. consumer for newer e-commerce players like Shein and Temu. Over time—and, in particular because of the rise of China-founded e-tailers' influence over U.S. consumers' shopping habits in recent years—de minimis has amassed a group of critics that include politicians hailing from both sides of the aisle. Some critics have argued that maintaining de minimis has allowed products made with forced labor to enter the U.S., while others have maintained that it creates an easier pathway for fentanyl to come into the country. Other proponents of de minimis reform, like the Alliance for American Manufacturing (AAM) have previously contended that the provision creates an unfair playing field for U.S. companies and manufacturers. Scott Paul, president of AAM, said in 2024 upon the group's decision to join the Coalition to Close the De Minimis Loophole that legislative reform on de minimis would benefit domestic manufacturers. He kept that sentiment up Tuesday, noting that reform on the provision is overdue. 'The de minimis loophole has long been exploited by trade cheats worldwide to circumvent tariffs and import counterfeit and dangerous goods into the United States. Bafflingly, it is our own law that has granted bad actors like Shein and Temu this outrageous advantage over American manufacturers and workers,' Paul said in a statement. 'However, this action, coupled with the White House's de minimis reform efforts, is a critical step toward a permanent policy. America must end de minimis treatment for imports from all countries now.' The New York Times estimated based on an analysis from the Congressional Budget Office that repealing de minimis could yield $39 billion in savings for the U.S. over the course of 10 years. Earlier this year, President Donald Trump collapsed what many have called a trade 'loophole' for goods entering the U.S. from China, forcing importers to pay applicable taxes on the shipments. That action came as part of Trump's 'Liberation Day' tariff scourge, and while de minimis remains in place for goods inbound from countries other than China, the administration has made its intentions clear: it plans to scrap de minimis for goods inbound from any country once U.S. Customs and Border Protection (CBP) has the means to handle the influx of imports such a move would cause. Republicans have stated they want the 'big, beautiful bill' passed and on Trump's desk for final signature by the time Independence Day comes this week. Glas said the NCTO would also like to see House lawmakers adopt the bill expeditiously, with the de minimis-ending provision intact. 'We are…grateful that the Trump administration has already used executive authorities to end de minimis access for Chinese goods—which represent approximately two-thirds of all de minimis shipments—while also laying the groundwork to close de minimis to commercial shipments from all countries,' Glas said. 'We request that the administration utilize its executive authorities to immediately close this damaging loophole for commercial shipments from all countries in the interim until this legislation ultimately takes effect.'
Fashion United
03-07-2025
- Business
- Fashion United
US Senate garners industry praise for passing bill that could end de minimis loophole
Textile industry leaders have praised the US Senate's decision to pass a budget reconciliation package that could potentially see the permanent end of de minimis for commercial shipments from all countries. The provision, which would end de minimis treatment by July 1, 2027, comes as part of a broader budget bill addressing tax code provisions and spending, among other things. President Donald Trump has requested for the bill to arrive on his desk by July 4. In its current format, the de minimis loophole has allowed low-value imports worth under 800 dollars to enter the US duty-free. In recent years, it has become the centre of trade debates, as textile and retail organisations have criticised the exemption for allowing excessive shipments from other countries to bypass regulations. The loophole had officially closed for Chinese imports to the US in May, however, trade organisations had called for a full halt on the exemption for other countries too, in order to avoid an influx of cheap Chinese goods to enter from third countries. The recent extension has thus been praised by such firms, including the National Council of Textile Organisations (NCTO), the CEO of which, Kim Glas, commended Senate leaders for including the permanent end of de minimis in the bill. Glas stated: 'This provision would help rebalance the playing field for the domestic textile industry, which has seen the closure of 28 plants over the past 23 months. We are urging congressional leaders to ensure inclusion of this critical provision in the final version of the reconciliation bill this week, which would bring us one step closer to marking a significant milestone for the US textile industry and a broad coalition of organisations dedicated to advocating for ending this destructive loophole.'
Fibre2Fashion
03-07-2025
- Business
- Fibre2Fashion
US Senate votes to end de minimis loophole by 2027, NCTO welcomes move
The US Senate has passed a sweeping budget reconciliation bill that includes a critical trade provision aimed at permanently ending de minimis duty-free treatment for commercial shipments from all countries by July 2027. The move is being hailed as a major victory by the National Council of Textile Organizations (NCTO), which has long advocated for reforming what it calls a harmful loophole in US trade law. The bill will now proceed to the House of Representatives, with the goal of delivering a final version to President Trump's desk before the July 4 holiday. US Senate has passed a budget reconciliation bill that includes a provision to permanently end de minimis duty-free treatment for commercial shipments by July 2027. NCTO has praised the move, calling it vital to protect US manufacturers from unsafe, low-value imports. NCTO urged immediate executive action and House approval to close this loophole, which has hurt domestic industry and consumer safety. 'On behalf of the US textile industry, I would like to commend Senate leaders for including an important provision in the broader budget reconciliation bill that would permanently end de minimis for commercial shipments from all countries, effective July 2027. The Senate language mirrors a provision included in the House reconciliation package passed earlier in May,' Kim Glas, president and CEO of NCTO , said in a press release. Glas praised the bipartisan leadership behind the effort: 'We sincerely appreciate Sens. Lindsey Graham (R-SC) and Sheldon Whitehouse (D-RI) for leading efforts on a legislative solution that would codify and permanently end duty-free de minimis treatment for millions of low-value packages from China and all countries, closing a loophole in US trade law that has harmed American manufacturers and workers and endangered American consumers.' She emphasised the devastating impact the loophole has had on the domestic industry: 'This provision would help rebalance the playing field for the domestic textile industry, which has seen the closure of 28 plants over the past 23 months. We are urging congressional leaders to ensure inclusion of this critical provision in the final version of the reconciliation bill this week, which would bring us one step closer to marking a significant milestone for the US textile industry and a broad coalition of organisations dedicated to advocating for ending this destructive loophole.' Glas also warned that the current de minimis system facilitates the entry of dangerous and unethical goods. 'De Minimis acts as a gateway for facilitating four million packages a day valued at $800 or less that often contain unsafe, toxic and unethical products made with forced labour, as well as lethal fentanyl and other illicit narcotics to the US market duty free and virtually unchecked. We applaud the Senate and House for validating that this loophole has caused widespread harm across businesses and communities and ending it once and for all.' Finally, she expressed appreciation for prior executive action and called for further immediate steps: 'We are also grateful that the Trump administration has already used executive authorities to end de minimis access for Chinese goods—which represent approximately two-thirds of all de minimis shipments—while also laying the groundwork to close de minimis to commercial shipments from all countries. We request that the administration utilise its executive authorities to immediately close this damaging loophole for commercial shipments from all countries in the interim until this legislation ultimately takes effect.' The textile industry now awaits final confirmation from the House as stakeholders push for swift enactment of the new trade rule, which could mark a turning point for US manufacturers facing growing pressure from low-cost, unregulated imports. Fibre2Fashion News Desk (KD)
Yahoo
23-06-2025
- Business
- Yahoo
Will Tech Tariffs Slow U.S. Growth?
The tariff roller coaster rumbles on, and for American manufacturers, there's no getting off the ride anytime soon. Even with a drastic reduction in duties on China-made goods and a respite from global 'reciprocal' tariffs, the looming threat of taxes on foreign wares will continue to sow confusion. For some footwear, apparel and textile manufacturers based in the United States, tariff turmoil has been a boon to business, and for others, it's resulted in orbiting by brands and retailers that are voicing interest but aren't quite ready to pull the trigger on onshoring. The uncertainty of President Donald Trump's tariff strategy hasn't just paralyzed retail decision-makers, but the supply chain. Without clarity about the future of trade policy, manufacturers are left wondering about when to scale up—and how. More from Sourcing Journal Amazon and FedEx Continue to Up Their Game on AI-Enabled Logistics Robots AGI Denim's Apparel Park: A LEED Platinum Pioneer in Sustainable Denim Manufacturing Tariffs Stall Long Beach Imports, Marking Slowest May Since Pre-Covid Era Much of the U.S. manufacturing landscape, across sectors and applications, relies on advanced, automated technologies that take the place of cobbler's benches and traditional sewing machines. Some next-generation processes, like 3D printing, are on the verge of breaking through as production drivers in the U.S. But all of these activities, new and traditional, rely on machinery, much of which is sourced overseas and, under the current tariff regime, subject to potentially onerous duties. 'There's a combination of issues happening right now. I think uncertainty in the marketplace has stymied some orders from coming to fruition, because people are wondering how the 90-day pause will conclude,' said Kim Glas, president and CEO of the National Council of Textile Organizations (NCTO), regarding the opportunities coming to American producers. According to Glas, the rapid evolution of trade policy may be driving up interest in American manufacturing, but it's not providing any clarity for producers that are trying to understand their place in the puzzle. In the absence of a clear path forward, the textile sector is waiting until July 9—the date that the deferral of reciprocal duties concludes—to see 'what kind of market signals' will materialize. NCTO has long been supportive of holding 'trade predators' like China and Vietnam accountable for non-market activities. 'But we have also advocated, including in the first Trump administration, for a few exceptions that we think are critical,' Glas said. Access to state-of-the-art textile manufacturing equipment is necessary to help improve processes at the nation's plants, both in order to drive efficiency and cost-competitiveness. But those upsides come with a hefty price tag. 'It's very expensive,' Glas said. 'When you apply a 10-percent tariff, or another tariff differential, it can make a real difference about whether or not you can afford to reinvest in your operation,' she explained. 'When you do a big capital expenditure like that, you have to amortize those costs over a period of time.' But duty costs are paid upfront. And on a machine that costs tens, if not hundreds of thousands of dollars, even a 10-percent duty could be make-or-break for a small operation. There are significant limitations to such equipment production in the U.S., Glas explained, and the advanced machinery is essential to most modern operations. Devices used for extruding, drawing, texturing or cutting man-made textile materials aren't made stateside. Many of these technologies hail from Europe, and of course, China. Glas stressed the tightness of margins in a price-competitive industry like textiles, where companies are likely to spring for the lowest-cost option. The risk in not having access to advantageous technologies is that foreign operators will gain those capabilities, underscoring their own attractiveness. 'We have to think about this in a holistic way. If the design is to unleash more U.S. investment, we're all for that. We want to see our U.S. textile industry grow and we need the administration's help,' Glas said. 'But there is a recognition across the industry that a lot of the textile machinery is no longer made here, and will not be made here overnight. So we need to have a special dispensation for that.' The NCTO lead said exemptions for production machinery could be written into potential forthcoming trade agreements or tariff regimes, or an exclusion process could be established after tariffs are reinstated (as was the case with Trump 1.0's Section 301 duties on China). Either way, she hopes decisions surrounding solution for American manufacturers are 'expeditious.' 'The tariffs are definitely making the machinery more expensive,' Mitch Cahn, owner of Newark, N.J.-based apparel and gear manufacturer Unionwear, told Sourcing Journal. The producer, which specializes in items like baseball caps and tote bags, imported machinery earlier this year from Canada, before Trump's tariff announcements. 'We didn't make the investment because we expected tariffs, we actually made the investment to ramp up for the U.S.A.'s 250th birthday' in 2026, he said. Cahn anticipates a surge of business surrounding the occasion, along with events like the World Cup and the Olympics. According to the business owner, doubling down on automated machinery (this time, on an apparatus that sews canvas totes) was a matter of necessity. 'We were having a lot of difficulty hiring more sewers; the pool was dry,' he said. 'We had to invest in machinery to make up the gap between what we were doing and what we want to be able to do next year.' The tote bag machinery, when it's operating at full speed, will do the work of 44 people with a single operator. 'We're still ramping up; the goal is to have it probably operating 18 to 20 hours a day by the end of the year,' he said. 'We didn't do it to speed up or save money. We just did it because there was really no way for us to grow linearly—not even exponentially,' he explained. 'There's no way for us to keep adding sewers to our operation, so we need it.' These planned investments in technology aren't a bid to replace human headcount with machines—in fact, Unionwear is holding on tight to the sewers that it employs. One prevailing issue inhibiting the growth of American manufacturing is the lack of a pipeline for skilled, affordable labor. The group has plans to automate other production processes, and is in talks with American manufacturers for those projects. Since the reciprocal duties on more than 60 countries were announced, Unionwear has seen a 'considerable' increase in interest and sales, Cahn said. 'If the tariffs are here to stay, the return is actually going to be much greater than it would have been without the tariffs,' he said of the investment in new technology. 'And the reason for that—and it's something we didn't expect—is the possibility that with automation, we actually can be competitive with import prices that have tariffs on them.' Cahn said that even if the Canadian-made machinery was tariffed at the 25-percent rate that Trump originally threatened, the company still would have made the buy. 'It really opens up a much bigger market for us,' he added. Kuba Graczyk, founder of Los Angeles-based 3D-printed footwear startup Koobz, agreed that investments in automation are key to expansion as a U.S. producer. The group, which prints mono-material, single-piece shoes, currently operates 60 3D printers and is building out a factory in Ventura, Calif. that Graczyk said will house 4,000 printers at the end of the next two years. This will give the startup the ability to churn out 'a couple million pairs of shoes a year,' he estimates. Since April 2—Trump's so-called 'Liberation Day'—business has picked up, he added. 'Customers who were actively working with us decided to substantially accelerate, customers who were just, like, looking at this as something interesting decided to launch projects with us to see where it could go instead of being hesitant,' Graczyk said. 'And those folks who ghosted me suddenly decided, 'Hey, let's get on that again.'' 'Of course, it tapered down' over the course of the ensuing weeks, which saw reductions in duties on China-made goods, deferrals on all reciprocal duties and a trade deal with the United Kingdom, among other trade developments. 'But out of all of this interest, we were able to create an amazing pipeline which is wired long-term, because one of our gauging questions was, 'If the tariffs get back to [what they were previously] would you still work with us?'' Koobz has decided only to take on business with partners that have a long-term plan for onshoring and budget allocated to the effort. But scaling up from 60 to 4,000 3D printers—which Graczyk said ring in at about $600 apiece—will require significant capital expenditure. While the price tag on the devices is modest, a tariff will add to it, and the group is looking to scale aggressively in a short period of time. Koobz looked into 3D printer options made outside of China, and found that the models made stateside as well as in Europe cost more and came equipped with fewer, less-advanced features. 'There are other sources than China. In Europe, there's still a handful companies that can manufacture equipment of that sophistication, at that scale—maybe not as good, maybe a little bit different architecture,' Graczyk said. But beyond price and performance, the factory owner is also looking to develop a smart and resilient supply chain, starting with machinery. One way to foster this could be to diversify sourcing for machines, but there would be differences between the units and the way they operate, as well as possible differences in quality and output. 'We are fortunate enough that we haven't pulled the trigger on any anybody yet, but we are at risk of slowing down because we would rather take more time to de-risk this as much as possible; to slow our progress instead of building while still thinking about where to source,' he said. 'We know we have to build a system which is very flexible.' Koobz is having discussions with 3D printer manufacturers about the potential of nearshoring printer production to free-trade-agreement countries like Mexico, and some are already considering doing so. 'Short-term, I'm not super worried about securing our next year's growth, because the printers that we're using for the current stage of products are already in the U.S., in distributor warehouses,' he said. 'We've already purchased some of them, so there's some frontloading of this equipment. But thinking forward, we need to add multiple colors, multiple materials—those machines are a little bit more sophisticated, and inventory of those doesn't exist.' The already-bought machines and those available onshore will float the company through to the last quarter of 2026, he believes. After that, Koobz will 'have to start solving the puzzle' of where to source the technology that powers its operations. 'Who are we going with for the next stage of building? Are we keeping the same equipment, the same manufacturer, buying higher-tier machines from them—or are we switching to something else because of the tariffs?' To Graczyk, there are bigger concerns than the added financial burden caused by the import taxes. It's the breakdown in the U.S.-China trade relationship—and the inkling that it could get worse, not better—that gives him pause about eating the cost of potential duties and sticking with Chinese suppliers. 'We already figured out how to work it out with the previous tariffs, the 145 percent, because [the printers] generate so much margin and profits that we can absorb [the tariff cost],' he said. But he worries about a 'complete decoupling' of the world's two biggest economies. 'We believe our business model supports the investment in this equipment, even with those outrageous tariffs, but the biggest threat is to business continuity; whether our business needs can be met long-term with companies based in China,' he added. But machines manufactured outside of China, too, will be subject to trade barriers—even those made in nations the U.S. considers allies. Desma, which crafts direct-injection molding machines used by the footwear industry in Germany, has also felt the impacts of tariff talk. While goods from the country face only a 10-percent duty rate (for now), the intense swings in the administration's tariff strategy are not doing anything to propel what was already a sustained and healthy trend toward onshoring, according to regional sales manager Marco Schafer. 'Many people consider options and discuss scenarios, but we have not experienced a rush into investing into manufacturing capabilities, and going at it full-steam,' he said. 'And I think people are right to be cautious, because you just saw what happened with China—you went from next to nothing to over 100 percent. Now they're back to 30 percent, and it's questionable if that has any effect whatsoever, or if the market will eventually just absorb those costs and not much will change.' Schafer said footwear firms have been eager to bring some portion of their manufacturing closer to home for at least three or four years, and those that understand the business case for doing so didn't need tariffs to push them over the finish line. 'It's not so much the Made in USA label; there are some hard economic figures' that underscore the appetite for reshoring. 'You are in the market you're selling in, so your logistics are shortened. The other thing is capital—if you order container loads of goods from Asia, your capital is tied up for quite a long time, whereas if you manufacture here and you have shorter lead times, your cash flow is actually improved.' But it's a decision every company has to make for itself, and much of it has to do with modeling costs versus output. 'A simplified view: you realistically have to make at least 500 pairs of the same or similar product in a day, in a one-shift operation, to even be able to consider an investment into automation,' he believes. Desma's 'bread and butter'—direct injection molding machines—allow footwear manufacturers to produce foam midsoles for performance shoes and sneakers. The largest, most advanced model can churn out 1,500 to 2,000 pairs per day. All told, it's a big investment, with machines costing hundreds of thousands of dollars. Ergo, the footwear manufacturers who are intent on scaling operations using these machines aren't doing so on a whim. 'All the major projects we're working on—whether those are already projects we have on order, or projects we hope to have on order soon—they all originated in 2024,' Schafer said. 'Those projects don't happen overnight; the machines and calculations are complex, so you have to really be sure that you believe in your product and in your forecast.' In short, tariffs are generating interest, but they're not turning the tides for makers of advanced machinery. Even if an American footwear firm decided today that the unstable trade environment necessitated a sea change in sourcing strategy, they couldn't fast-track that shift. 'We're dealing with six-to-seven-month lead times after we after we get an order, but to get the right configuration of the equipment, whether it's a machine or automation line, you're easily involved with engineering six to 12 months before a company is ready to place a [purchase order]. These are often two-year projects,' he said. 'People know that if they get into this field, it's a big commitment.' There are myriad other factors in the equation, from availability of raw materials (many of which are still sourced from Asia or Europe), to staffing (workers must be trained on robotics and electronics), and facilities, which must be equipped to support the machinery and its output. 'All that needs to be put into consideration,' Schafer added. 'And therefore, the whole tariff thing—yes, it triggered some discussions, but no active projects as of yet.' That could change with more clarity about the future of America's trade relationships. Of the volatility of the past two months, Schafer said, 'We hope that the worst is behind us, and that after the loud time comes the time of more quiet negotiations behind closed doors.' This article ran in SJ's Tech Report. To download the full report, click here. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Fibre2Fashion
26-05-2025
- Business
- Fibre2Fashion
US manufacturers should focus on tanks, tech, AI, not textiles: Trump
US tariff policy aims at promoting domestic manufacturing of tanks and technology products, not sneakers and T-shirts, President Donald Trump said yesterday. Speaking to reporters before boarding Air Force One in New Jersey, Trump said he agreed with the recent remark by treasury secretary Scott Bessent that the United States does not necessarily need a 'booming textile industry'. The National Council of Textile Organizations (NCTO) had criticised Bessent's comments. US tariff policy aims at promoting domestic manufacturing of tanks and technology products, not sneakers and T-shirts, President Donald Trump said yesterday. He agreed with treasury secretary Scott Bessent's remark that the US does not necessarily need a 'booming textile industry'. "We're not looking to make sneakers and T-shirts. We want to make military equipment….big things…AI thing," he said. "We're not looking to make sneakers and T-shirts. We want to make military equipment. We want to make big things. We want to make, do the AI thing," Trump said. "I'm not looking to make T-shirts, to be honest. I'm not looking to make socks. We can do that very well in other locations. We are looking to do chips and computers and lots of other things, and tanks and ships," Trump was quoted as saying by global newswires. The American Apparel & Footwear Association (AAFA) responded by saying that that tariffs are not good for the industry. "With 97 per cent of the clothes and shoes we wear being imported, and with clothes and shoes already the most highly tariffed industry in the US, we need to focus on common sense solutions that can move the needle," AAFA president Steve Lamar said in a statement. "More tariffs will only mean higher input costs for US manufacturers and higher prices that will hurt lower income consumers," he noted. Fibre2Fashion News Desk (DS)
