Testifying before a House Ways and Means Trade Subcommittee hearing on “Supporting U.S. Workers, Businesses and the Environment in the Face of Unfair Chinese Trade Practices,” National Council of Textile Organizations president and CEO Kim Glas stressed China’s dominance in global textile and apparel production and its adverse impact on the U.S. textile industry.
Glas detailed ways to strengthen onshoring and nearshoring of supply chains and recommended critical policies that address China’s 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,” Glas said. “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.”
She told the committee that 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.
“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 said. “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, 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.”
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Glas offered key policy recommendations to the committee in her oral and written testimony. These included enacting tax incentives and other targeted critical investments to strengthen Western Hemisphere trade relationships and re-shore manufacturing. She also called for closing the Section 321 De Minimis Tariff loophole that allow goods that are otherwise subject to duties to enter the U.S. duty-free due to lower amount thresholds, a technicality that has fueled the rise of companies like reality-show newbie Shein, the fast-fashion giant failing on the toxic-chemical front, employing dubious consumer-facing and workforce practices, and winning at TikTok.
Vitally, Glass said the United States must step up its enforcement of forced labor of Uyghurs and other minorities in the Xinjiang Uyghur Autonomous Region, “firmly maintain Section 301 penalty duties on China for finished textiles and apparel products,” and immediately pass the Miscellaneous Tariff Bill (MTB) to help manufacturers with a limited list of critical inputs not made in the U.S., and review and close the mechanism in the MTB renewal that allows for finished products.
She also urged lawmakers to strengthen buy-American practices for personal protective equipment (PPE) and other essential products, and to block expansion of the Generalized System of Preferences (GSP) to include textile and apparel products.
In addition, Glass said the government should use trade enforcement in free trade agreements to “mitigate transshipment schemes by unscrupulous importers seeking to illegally circumvent duties.”