Collaboration is finally taking place in Washington.
Organizations representing the interests of American textile manufacturers, apparel brands, footwear brands and retailers teamed up this week to jointly present a trade incentive program that would benefit onshore industry to the Office of the United States Trade Representative.
Working together for the first time, the National Council of Textile Organizations (NCTO), American Apparel & Footwear Association (AAFA), United States Fashion Industry Association (USFIA), and the U.S. Industrial and Narrow Fabrics Institute (USINFI) wrote to the USTR on Monday to propose a trade policy initiative related to the recently concluded Section 301 investigations into forced labor policies across dozens of global economies.
Hearings on the investigations will take place Tuesday through Thursday, and NCTO CEO and president Kim Glas will present the joint plan as a part of her testimony.
The groups, which typically diverge when it comes to trade policy, crafted a framework that aims to “reshore domestic manufacturing, stabilize and grow Western Hemisphere textile and apparel supply chains, and help brands and retailers to diversify sourcing at a critical time.” They believe that the initiative could revitalize farming, manufacturing, exports and investment and create 56,000 new jobs in the U.S. in the process.
Under the program, brands and retailers would earn tariff credits when they purchase Made-in-the-U.S.A. textiles and qualified apparel products from nations in the Western Hemisphere that have free trade agreements with the U.S., like the Dominican Republic-Central America Free Trade Agreement (CAFTA-DR) and the U.S.-Mexico-Canada Agreement (USMCA). “This dynamic will increase the market share for key FTA partners in the Western Hemisphere, further reducing the dependence of the apparel industry on sourcing in Asia,” the letter said.
The credits would be used to offset the cost of any Section 301 tariffs that the USTR decides to impose on free trade agreement countries in the Americas. Brazil, Canada, Chile, Mexico, Argentina, Colombia, Costa Rica, Dominican Republic, Ecuador, El Salvador, Guatemala, Guyana, Honduras, Nicaragua, Peru, Trinidad and Tobago, Uruguay, and Venezuela are among the countries that have been targeted.
On average, 20 percent of the declared customs value of USMCA or CAFTA-DR-qualifying textile and apparel goods would be credited to offset the Section 301 duties on analogous imports from certain eligible countries, but companies could earn enhanced credits when the product in question uses U.S.-made yarn or fabric.
“We believe with the right incentives we can grow jobs substantially in the United States, reopen shuttered factories, and make the critical investments needed to maintain and to grow America’s textile industry by also helping brands and retailers find new opportunities,” the associations wrote in their letter.
Should the administration adopt the incentive structure, the U.S. could see its textile exports to Western Hemisphere partners potentially double to a total of $29 billion per year—a much needed boon to an industry that has been wracked by plant closures and job losses in recent years.
For context, American textile and apparel manufacturers produced nearly $61 billion in products last year, employing 453,000 across the country. The combined value of fiber, textile and apparel exports amounted to $27 billion—70 percent of which was exported to other countries in the Americas.
Meanwhile, brands and retailers selling apparel generated $440 billion in sales in 2025, accounting for over 2.5 million U.S. jobs. Looking at the aggregate value brought to the economy by upstream players and retail, the industry contributes $500 billion to the U.S. economy each year, providing jobs for over 3 million Americans, NCTO, AAFA, USFIA and USINFI wrote.
“This program would not only help reinvigorate the domestic textile production chain and unleash U.S. yarn and fabric sales to our critical export markets in the Hemisphere, but it could also be used to reward countries that undertake commitments and take appropriate steps to effectively enforce prohibitions on the importation of goods produced with forced labor,” the letter added.