In his 40-year career, William Lucas has witnessed nearly every step in the decline of the American apparel industry. As general manager of Eagle Sportswear, a Middlesex, N.C., company that cuts, sews and assembles apparel, he hopes to preserve what’s left of that industry.
Mr Lucas, 59, has invested hundreds of thousands of dollars in training his staff to use more efficient technologies that come with financial bonuses for getting employees to work faster.
But they fear that US trade rules could harm their investments.
The rule, known as de minimis, allows foreign companies to ship goods worth less than $800 directly to U.S. customers while avoiding tariffs. Mr. Lucas and other textile manufacturers in the Carolinas, once a textile hub, argue that the provision – nearly a century old, but rapidly growing in use – places an onus on foreign producers to keep prices low for retailers and Also inspires more trust.
Defenders of the rule say it does not account for America’s lack of competitiveness. But domestic manufacturers say it would benefit China in particular at the expense of American manufacturers and workers.
“It’s very hard to compete with him,” Mr. Lucas said. “Someone will just have to change the law. Someone just has to change the rules.”
During the pandemic, as e-commerce purchases increased, the use of de minimis also increased.
According to Customs and Border Protection, in the 2016 fiscal year, 150 million packages entered the United States tariff-free, but by 2023, that figure is expected to rise to more than a billion. About half are textile and apparel products.
a congressman report In June it found that China-based ultrafast-fashion retailers Shein and Teemu took about 30 percent of the packages falling under de minimis. (Sheen and Teemu have said they are willing to work again on the exemption.) But while American manufacturers say the rule is one of their biggest challenges, it is not the only one.
Apparel sales are down from pandemic highs and have declined. That means fewer orders for the remaining operators in the Carolinas. Brian Ashby, president of Carolina Cotton Works of Gaffney, S.C., said he purchased equipment a few years ago to handle higher capacity, but he noticed in late summer that his buyers were backing off.
According to the National Council of Textile Organizations, a lobbying group, eight textile plants across the southern United States closed between August and December. in November, a yarn facility One reason cited for its demise in North Carolina was the increasing use of de minimis.
Council President Kim Glass said, “When you have plants that have been open for so long and are closing, it’s a confusion in the coal mine about how policy and the economy contribute to the economic damage caused to the industry. Has been.”
For much of the 20th century, mills were abundant in the area. This began to change in the 1990s after the North American Free Trade Agreement was signed, which eliminated US tariffs on products from neighboring countries and large multinationals began to shift apparel production to Mexico. In 2001, when China joined the World Trade Organization, retailers turned to Asia in search of cheap labor to produce their goods. According to the Bureau of Labor Statistics, since 1994, US apparel manufacturing employment has declined by 65 percent.
The surviving companies are mostly family-run and privately held, constantly pumping money into their businesses to pay for expensive new equipment and automation to remain competitive. Many produce goods for the US military, which requires some clothing to be American-made, or for companies whose stated mission is just that. According to the American Apparel and Footwear Association, in 2022, only 2.9 percent of apparel sold in the United States was made domestically.
Halsey Cook, chief executive of Milliken, a 159-year-old manufacturer in Spartanburg, S.C., that makes items such as military apparel, car floor coverings and merchandise for Patagonia and Carhartt, said that because of de minimis, the textile industry was “feeling “Pain in a New Way.”
“That apparel industry has largely already gone overseas,” he said. The remaining American apparel manufacturers have adjusted to the realities of free trade agreements, Mr. Cook said, but there has been a huge increase in the use of de minimis. has “completely exposed and weakened that system.”
In cotton farms, ginneries, yarn mills, dye facilities and cutting and sewing shops in the Carolinas, negotiations can be heated when it comes to business law, depending on the work being done.
Parkdale Mills, one of the nation’s largest yarn manufacturers, has a plant in Gaffney, SC, that handles only cotton. Men bring in bales of cotton on forklifts, and automated equipment cleans the cotton and turns it into spun threads that can be made into fabric. Many Parkdale employees have been working there for decades, and Executive Vice President Davis Warlick warmly welcomes his employees.
,We’re trying to create more jobs,” Mr. Warlick said after a tour of the 400,000-square-foot facility. But he said he and his staff are scared. “All of this is at risk from one bad, ill-informed decision every day on Capitol Hill. And it all goes away and they don’t understand it.”
The clothing industry is one of the most price-sensitive, and retailers will take advantage of opportunities to save as much money as possible.
“When you destroy any aspect of the supply chain, it hurts everybody,” said Ms. Glass, of the National Council of Textile Organizations. He said that this includes American farmers and the people working with them.
Tatum Eason knows this well. She is the owner of the Enfield Cotton Ginnery in eastern North Carolina, which cleans hundreds of bales of cotton for farmers in the surrounding community. She sifts out the debris and other impurities inside the cotton without charging any fee, and earns money by selling the cotton seeds that come out during the cleaning. (That cottonseed is later used to make cottonseed oil and to feed cattle in the United States and tilapia fish in Saudi Arabia, she said.)
In 2023, they picked half as much cotton as the previous year. And with higher interest rates making operational credit more expensive for farmers and the price of cotton futures falling, he thinks the year ahead could also be challenging. Their business depends on farmers’ optimism, and they will plant less cotton in April due to the gloomy environment.
She filled her office with bags of Miss Vickie’s potato chips and a bubble gum dispenser – sweet incentives for farmers to come back to her so she could encourage them that planting cotton was worth it.
“We’re looking at what we can do in our operation to figure out what we’re going to grind each year,” he said, sitting inside his wood-paneled office. “This is worrisome.”
The e-commerce boom caused by the pandemic was not the only factor in the proliferation of de minimis shipments. Congress in 2016 raised The minimum threshold has been reduced from $200 to $800 in an effort to reduce costs for importers, speed up delivery times for small and medium-sized businesses, and reduce paperwork for Customs and Border Protection.
The textile and apparel industry wants to rein in the use of the provision, but has not agreed to a proposal to send to lawmakers. But there seems to be a consensus that manufacturers in China and across Asia are getting free access to the US consumer market.
There are bills in Congress that would prevent certain countries, such as China and Russia, from using this provision, but none call for eliminating it.
Proponents of de minimis say eliminating it could increase costs for consumers and businesses that are importing goods. The competitive challenges felt by the textile industry are not caused by the provision, according to John Pickel, a senior director of international supply chain policy at the National Foreign Trade Council, a lobbying group that supports de minimis.
“I think it’s kind of tempting to hang your hat as a bogeyman about why particular domestic industries aren’t competitive,” Mr. Pickel said.
As specifications and bills are being sent to Washington, US manufacturers are continuing to fulfill orders.
Inside a one-story building, a staff of 75 fulfills orders for hoodies, shorts and sweatpants for customers like the U.S. military and American Veterans, a privately held retailer that sells domestically made clothing. is dedicated to.
Up to five workers stand next to each other and share in the tasks required to complete a garment. This is a deviation from the traditional “batch sewing” approach, in which a person sits and works on an individual task before moving a garment down the production line. By placing multiple pairs of hands and eyes on a piece of material, addressing it immediately, the company aims to increase quality control and provide greater value to customers.
Pay starts at $11 an hour and can increase to $17, including bonuses for meeting production goals. It used to take an hour to complete one garment, Mr. Lucas said, but that time has been cut to 43 minutes.
Mr. Lucas says he had to charge American Giant more last year to make some of its apparel, partly because of orders that require smaller batches. Bayard Winthrop, who founded American Giant in 2012 and has built a domestic supply chain that can make a $138 cotton hoodie for his company, says it’s all fine.
Many retailers in their situation have decided to reach overseas to produce more at lower prices. It is more important to them to produce in the United States and keep those jobs, he said.
“The people here deserve to be celebrated as the heroes of this country, and we’ve lost our way for too long,” he said, sitting in Mr. Lucas’s office at Eagle Sportswear. “I just don’t know why. I believe it should be celebrated more – celebrated more from a policy perspective.”