The US textile sector’s call for action comes as the one-month pause on tariffs that was announced on 3 February for imports from Mexico and Canada are set to be lifted.
If the US proceeds with these tariffs, both Mexico and Canada are also prepared to impose their own counter-tariffs.
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A statement was issued by the National Council of Textile Organizations (NCTO), National Chamber of the Textile Industry (CANAINTEX), and Canadian Textile Industry Association (CTIA) calling for a deal to be made as a matter of urgency.
The associations also requested an immediate resolution to the de minimis threshold issue.
The associations said: “All three of our countries are partners in a vital textile and apparel coproduction chain that generates $20bn in two-way trade and helps support over 1.6m jobs under the United States-Mexico-Canada Agreement (USMCA) — a trade deal that was negotiated during President Trump’s first term in office.”
The US textile industry relies on exports to Mexico and Canada as the countries account for $12.3bn or 53% of total US global textile exports. These materials return as finished products under the USMCA agreement.
Mexico is an exporter of textiles and apparel to the US, totalling $9bn annually and ranking as the fourth-largest textile exporter and sixth-largest apparel exporter to the country.
Canada sends $1.8bn worth of textiles and apparel to the US and Mexico combined. The US receives about 64% of Canada’s total global textile exports, which includes specialised materials such as flame-resistant fabrics and medical equipment such as PPE.
NCTO president and CEO Kim Glas explained: “While we fully support President Trump’s efforts to stem illegal migration and to address the fentanyl crisis as quickly as possible, we urge the administration to refrain from imposing penalty tariffs on imports from USMCA partners. We are focused on ensuring a normalised trading relationship between our countries.
“Imposing penalty tariffs on imports from critical US free trade agreement (FTA) partners will only serve to benefit China and other Asian countries that don’t play by the rules and to harm the US textile industry and manufacturers in our Western Hemisphere supply chains.”
Glas also pointed out that as part of any deal with Mexico, Canada — and China — we also call on the Trump administration to end the de minimis tariff exemption immediately for imports from all countries.
“This loophole in US trade law, which allows imports valued at $800 or less to enter the United States duty-free hurts our textile and apparel industries, rewards countries like China, and helps facilitate the flow of illegal and toxic products, such as fentanyl and fentanyl precursors into the US market,” she said.
S&P Global Ratings retail and consumer managing director Bea Chiem noted that while a universal tariff has not yet been declared, its introduction could further increase costs for consumer and retail businesses.
She added the duration and potential impact of these tariffs remains uncertain.
However, Chiem pointed out that given current inflationary pressures and a challenging consumer market, fashion businesses may find it difficult to transfer cost increases resulting from tariffs onto consumers
Chiem said: “Broad-based tariffs could hurt more US consumer products and retail companies this time around than in 2018, which was more manageable.
“Over 24% of retail credits and 19% of consumer credits have negative outlooks, indicating an above-average negative bias and little headroom for additional macroeconomic pressures.”
On 1 February, President Trump declared a 25% tariff on Mexican and Canadian goods with a reduced 10% rate on Canadian energy products, plus an extra 10% on Chinese imports. China retaliated with tariffs ranging from 10% to 15% on select American goods.
In addition, Trump introduced a 25% tariff on steel and aluminium imports into the US.
