Amid the uncertainty of U.S. trade policy in the Trump administration, four U.S. textile trade associations – the National Council of Textile Organizations, American Fiber Manufacturers Association, Narrow Fabrics Institute and U.S. Industrial Fabrics Institute – outlined causes of the $95 billion U.S. trade deficit in textiles and apparel in joint comments submitted to the U.S. Department of Commerce this week.
The groups also suggested remedial actions for the administration to boost U.S. production and jobs. In addition, NCTO’s Upholstery Fabrics Committee submitted a separate statement detailing the reasons for the U.S. trade deficit in upholstery fabrics, focusing on the imbalance with China in particular.
“A trade deficit study like this should have been initiated years ago,” said NCTO President and Chief Executive Officer Auggie Tantillo, referring the President Trump’s executive order to do so. “If America is to reverse its trade-related red ink and create more jobs, policymakers must have a better understanding of the policies and economic factors responsible for driving production offshore.”
The organizations were also signatories to comments submitted by the Manufacturers for Trade Enforcement to DOC urging the U.S. to continue to treat China as a nonmarket economy country under U.S. antidumping and countervailing duty law.
During the presidential campaign, Trump said he was determined to have the Treasury Department declare China a currency manipulator over its currency policy, which could have led to punitive measures. The Obama administration had held that threat over China for many years to encourage reform, but never did. Obama and financial analysts said China had initiated reforms of how the yuan is valued.
Trump said he had backed off the threat to China mainly as a bargaining chip on trade and to encourage China to put pressure on North Korea to ease off its nuclear threats.
But Tantillo said, “China’s widespread use of nonmarket economic activities is one of the biggest drivers of America’s trade deficit.”
In addition, Trump had threatened to pull out or renegotiate the North American Free Trade Agreement, but has somewhat backed off that, as well, instead initiating a dialog with Canada and Mexico to find ways to update and improve the trade pact.
NAFTA and the Central American Free Trade Agreement provide important export markets for U.S. textiles. The value of shipments for U.S. textiles and apparel was $74.4 billion last year, a near 11 percent increase since 2009. U.S. exports of fiber, textiles and apparel were $26.3 billion in 2016. U.S. employment in the textile supply chain was 565,000 in 2016.