WASHINGTON — The National Council of Textile Organizations (NCTO), American Apparel & Footwear Association (AAFA), United States Fashion Industry Association (USFIA), and U.S. Industrial and Narrow Fabrics Institute (USINFI) presented a trade incentive program to the Office of the United States Trade Representative (USTR) on July 6, 2026. The organizations wrote to the USTR to propose the initiative, which is related to Section 301 investigations into forced labor policies.

Hearings concerning the Section 301 investigations are scheduled to run from Tuesday through Thursday. NCTO CEO and president Kim Glas is expected to present the joint plan during her testimony. The framework for the proposed program 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."

Under the proposed program, brands and retailers would earn tariff credits for purchasing "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. These qualifying free trade agreements include the Dominican Republic-Central America Free Trade Agreement (CAFTA-DR) and the U.S.-Mexico-Canada Agreement (USMCA). The credits would then be used to offset the cost of any Section 301 tariffs that the USTR might impose on free trade agreement countries in the Americas. On average, 20 percent of the declared customs value of USMCA or CAFTA-DR-qualifying textile and apparel goods would be credited to offset Section 301 duties on analogous imports from certain eligible countries. Companies could earn enhanced credits if the product uses U.S.-made yarn or fabric.

The associations indicated in their letter that the initiative could create 56,000 new jobs in the U.S. They stated that U.S. textile exports to Western Hemisphere partners could potentially double to $29 billion annually if the administration adopts the incentive structure. The letter said, "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." It added, "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."