From the Sector

• Key Provision Guarantees Long-Term Contracts for Domestic PPE

The National Council of Textile Organizations (NCTO), representing the full spectrum of U.S. textiles from fiber through finished products, issued a statement today welcoming Senate passage of the bipartisan U.S. Innovation and Competition Act (USICA). As part of the bill’s effort to address overall manufacturing and technology competitiveness issues from the perspective of the U.S.-China relationship, the legislation will help reconstitute a domestic supply chain for personal protective equipment (PPE).

“We commend the Senate for ushering the bipartisan USICA, designed to make the U.S. more globally competitive against China, across the finish line which includes an important provision to help onshore personal protective equipment (PPE) production,” said NCTO President and CEO Kim Glas.

“We sincerely thank Senator Rob Portman (R-OH) and Senator Gary Peters (D-MI) for working to include their Make PPE in America Act in the USICA, a critical priority of the U.S. textile industry,” Glas said. “This language will help onshore critical production of medical personal protective equipment (PPE) by guaranteeing long-term contracts for American-made PPE and establishing a much-need domestic procurement requirement for federal purchases of these essential products. It will ensure that that U.S. taxpayer dollars are utilized to construct and secure a domestic production chain for the manufacture of lifesaving PPE and other essential medical supplies,” Glas said.

NCTO led an industry and labor coalition effort supporting the inclusion of the Make PPE in America Act in the USICA.  The USICA contains the key provisions of the Portman-Peters bill that ensures all PPE purchased by the Departments of Homeland Security, Health and Human Services and Veterans Affairs are Berry Amendment-compliant and guarantees long-term contracts for these critical items to incentivize domestic production.

“While we support the overall USICA package, which includes many items of critical importance to the U.S. textile industry, our industry is extremely concerned about a provision that was added in the eleventh hour that could sidetrack the critical effort to onshore a self-sufficient PPE industry,” Glas added. “This harmful provision would unilaterally suspend normal tariffs and penalties assessed on PPE imports for two years. Doing so would allow China to maintain its stranglehold on the U.S. PPE market, while working at cross-purposes with other provisions of the bill designed to incentivize much needed investment in domestic PPE manufacturing. U.S. manufacturers retooled production and have significant idle capacity.  It is critical that the House of Representatives strike this damaging language if this legislative package is considered.

“Congress and the administration need to keep PPE tariffs in place to support U.S. businesses and workers who abide by higher labor, environmental and production standards.  The industry reconstituted supply chains to help healthcare frontline workers.  Our industry has significant capacity to help meet U.S. medical needs.  This provision is the absolute wrong message to send to American manufacturers and its workforce.” Glas noted.

Rejects Importer Attempts to Remove China 301 Tariffs on Finished Products

The National Council of Textile Organizations (NCTO), representing the full spectrum U.S. textiles from fiber through finished sewn products, issued a statement today welcoming the Trump administration’s proposals on an economic stimulus package to gird the economy against the impact of the coronavirus outbreak, but the organization urged officials to reject any attempts by importers to remove China 301 tariffs on finished products as part of any relief package.

As part of a Phase One deal with China, the administration reduced duties on finished apparel and textile products implemented on Sept.1 from 15 percent to 7.5 percent. Finished apparel, home furnishings and other made-up textile goods equate to 93.5 percent of U.S. imports from China in the sector; while fiber, yarn, and fabric imports from China only represent 6.5 percent, according to government data.

NCTO is a Washington, DC-based trade association that represents domestic textile manufacturers, including artificial and synthetic filament and fiber producers.

• U.S. employment in the textile supply chain was 594,147 in 2018.

• The value of shipments for U.S. textiles and apparel was $76.8 billion in 2018.

• U.S. exports of fiber, textiles and apparel were $30.1 billion in 2018.

• Capital expenditures for textile and apparel production totaled $2.0 billion in 2017, the last year for which data is available.

• Trade tensions among major economies elevate project risk
• Buoyant US labor market increases threat of substantial project cost overrun
• Lenzing will reassess this decision on an ongoing basis
• Intensified focus on lyocell expansion project in Prachinburi (Thailand)

Lenzing’s Managing Board concluded today to temporarily mothball the lyocell expansion project in Mobile, Alabama (USA). The rising likelihood of increasing trade tariffs, paired with the potential surge in construction costs due to the buoyant US labor market, have increased the risk profile of this project. Consequently, Lenzing will put all its effort to readjust the execution of its growth plan to meet strong market demand of its lyocell fibers. This includes an increased focus on the lyocell expansion project in Prachinburi (Thailand). Lenzing will reassess this decision on a regular basis but no substantial additional lyocell volumes, over and above the successful 25.000 tons expansion in Heiligenkreuz (Austria), will be added to the market in 2019 and 2020 by Lenzing.

Lenzing continues to be fully committed to implement its sCore TEN strategy and remains on track for the specialty expansions such as TENCEL™ Luxe filaments and LENZING™ ECOVERO™ viscose fibers, however this decision will slow down the implementation of the lyocell specialty staple fiber growth.