NCTO criticizes new tariff 'textile mechanism' clause as harmful to US manufacturers

Hannah Abdulla Mon, July 27, 2026 at 5:10 AM PDT | 3 min read

On 24 July, the Trump Administration announced new tariffs on imports from 60 economies, following an investigation by the Office of the United States Trade Representative (USTR) into failures to prohibit and enforce bans on goods produced with "forced labour."

However, the National Council of Textile Organisations (NCTO) has pointed out that a textile mechanism clause will offer relief from Section 301 duties for textile and apparel imports from Bangladesh, Cambodia, Indonesia, and Malaysia, based on those economies' imports of US cotton and textiles through tariff-rate quotas. The NCTO also noted that the administration did not exempt textile inputs and machinery that are not available domestically.

"Such exemptions are critical to onshoring the US supply chain away from countries that fail to prohibit effectively, and combat forced labour," the NCTO said.

NCTO President and CEO Kim Glas stated that no other industry has been more disadvantaged by forced labour than the US textile industry, which employs 453,000 workers and has lost 41 plants over the past two-plus years.

"We remain strongly concerned that USTR's textile mechanism will harm the very domestic manufacturers the administration seeks to help.

"These tariff benefits for Asia will come at the expense of US textile manufacturers and the Western Hemisphere—the destination for 70% of total annual US textile and apparel exports. Our hemispheric supply chains compete directly against Asia. Any apparel market shift to sources outside of the Western Hemisphere means less opportunities for US textile exports and further contraction of our industry at home.

"US apparel imports from major Asian supplier countries that use textile components from China, including Bangladesh and Indonesia, increased by double digits last year."

Since 2019, Asia has expanded its US market share from 77% to 79%, while the Western Hemisphere's share has narrowed from 16% to 12%. The NCTO stated that the removal of Section 301 duties on apparel imports from Asian countries will only further accelerate these alarming trends. The organisation also pointed out that cotton produced with Uyghur forced labour in Xinjiang, China, is "pervasive in global textile and apparel supply chains" and that these imports have resulted in irreparable economic harm to the US textile industry and the Western Hemisphere.

"The administration should be focused on stepping up enforcement of the Uyghur Forced Labor Prevention Act, which has declined by every measure, to bolster the domestic textile industry and drive demand for US cotton.

"While some of the actions announced today represent a positive step forward in combatting forced labour in global supply chains, the administration's textile mechanism, which would eliminate Section 301 duties on textile and apparel imports from Bangladesh, Cambodia, Indonesia, and Malaysia for imports of US cotton, will be a step backwards.

"We want to dispel the notion that the textile mechanism proposed by USTR will promote the export of US yarns and fabrics. Regrettably, it will not open market opportunities for our industry because of Asia's chronic reliance on subsidised textile inputs, and it will have seriously damaging effects for domestic textile manufacturers if US raw cotton is included in the mechanism.

"NCTO and the apparel and retail industry united for the first time behind an alternative mechanism proposal to USTR that has the potential to double US textile exports, spur growth and investment in the US and the Western Hemisphere and address forced labour concerns."

"New tariff 'textile mechanism' clause to disadvantage US textile makers" was originally created and published by Just Style, a GlobalData owned brand.