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Here’s a Breakdown of What’s Actually Going on in the US Textile Industry

Things are tense in the global marketplace right now, but the good news for an apparel and textile sector facing potential blow back from the tariffs flying back and forth between the U.S. and China is that the sector will be going into any battle strong.

In its 2018 State of the U.S. Textile Industry overview, the National Council of Textile Organizations (NCTO) said it’s been an “amazing” year for the U.S. textile industry.

“The numbers show the fundamentals for the U.S. textile industry are sound. This is true even though some markets for U.S. textiles and apparel were soft last year,” said NCTO chairman William V. McCrary Jr. “For the most part, any sluggishness was due to factors beyond control, such as disruption in the retail sector caused by the shifting of sales from brick and mortar outlets to the internet. With that said, the U.S. textile industry’s commitment to capital re-investment and a continued emphasis on quality and innovation make it well-positioned to adapt to market changes and take advantage of opportunities as 2018 moves along.”

Looking at the numbers, NCTO said the value of shipments for man-made fibers, yarns, fabric, apparel and sewn products was $77.9 billion last year. The sector accounted for 550,500 U.S. jobs, with the majority of workers based on Georgia, followed by North and South Carolina, California and Tennessee.

The U.S. exported $28.6 billion worth of apparel and textiles last year, up from $20.1 billion in 2009. Breaking that down further, fabrics made up the largest portion of those exports at 31 percent. Cotton, wool and fine animal hair followed, accounting for 21 percent, while apparel made up 20 percent of the U.S. exports. Man-made fibers were 15 percent of those exports, and home furnishings and non-apparel sewn products accounted for 13 percent.

“The United States is especially well-positioned globally in fiber, yarn, fabric and non-apparel sewn products markets; it was the world’s 4th largest individual country exporter of those products in 2016,” McCrary said.

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Among the top three export markets for U.S. apparel and textile goods, were Mexico, Canada and China—three countries the U.S. has been stoking tensions with over trade deals and targeted tariffs. Exports to the NAFTA countries in 2017, accounted for $11.8 billion, or 41 percent. The next largest share went to Asia, with $8.7 billion worth of textile and apparel exports bound for the region, 30 percent of the total. That means 71 percent of U.S. fiber, yarns, fabrics and apparel are headed to countries where trade relations are presently being upended.

NCTO, however, believes Trump’s trade policies will help reposition the U.S. as the leader it needs to be. Particularly with regard to NAFTA.

“America’s most important trading relationship is NAFTA, a pillar upon which the U.S.-Western Hemisphere textile supply chain is built,” McCrary said. “Let me be clear. NCTO strongly supports NAFTA. That said, NCTO agrees with President Trump that NAFTA can and must be improved. NAFTA’s yarn-forward rule of origin contains loopholes that benefit third-party countries, such as China. Closing them would boost U.S. and NAFTA partner textile and apparel production and jobs.”

As its report came hours ahead of Trump’s announcement Thursday that he would levy $60 billion worth of tariffs against China, McCrary’s NCTO statements did not take a position on the tariffs and what they might mean for textiles. However, its outlook for the sector appears to be a positive—though cautious—one.

“Although the U.S. textile industry is world-class, it cannot afford to rest on its laurels,” McCrary said. “There will always be intense and sometimes unfair competition from abroad, changing consumer demands and inevitable economic downturns.”