In a rare show of alignment across the U.S. textile, apparel and retail supply chain, leading industry associations have jointly urged the Trump administration to adopt a new textile and apparel trade incentive programme aimed at reshoring manufacturing, strengthening Western Hemisphere supply chains and driving fresh investment in U.S. textile production.
In a joint submission filed with the Office of the United States Trade Representative (USTR) on July 6, 2026, the organisations proposed an innovative trade incentive mechanism linked to the ongoing Section 301 investigations into various economies’ policies on goods made with forced labour. The proposal marks the first time these groups have publicly come together to advocate a common trade policy initiative, despite historically holding divergent positions on trade matters.
The submission was jointly filed by the National Council of Textile Organizations (NCTO), the American Apparel & Footwear Association (AAFA), the United States Fashion Industry Association (USFIA) and the U.S. Industrial and Narrow Fabrics Institute (USINFI).
Tariff credit mechanism designed to reward U.S. textile sourcing
At the heart of the proposal is a textile and apparel trade incentive programme that would allow brands and retailers to earn tariff credits when they purchase U.S. textiles and qualified apparel goods from key Western Hemisphere U.S. free trade agreement (FTA) partners.
Those tariff credits could then be used to offset potential Section 301 tariffs from eligible countries. According to the submitting organisations, the programme is intended to create a mutually beneficial framework that supports U.S. textile mills while also helping apparel brands and retailers diversify sourcing during a period of global supply chain uncertainty.
The groups said the mechanism would help reshore domestic manufacturing, stabilise and expand Western Hemisphere textile and apparel supply chains, and create new sourcing pathways for U.S. brands and retailers.
Proposal could create 56,000 U.S. jobs and unlock new investment
In their submission, the associations argued that the proposed incentive programme could deliver significant economic benefits across the U.S. textile and apparel ecosystem. They estimate that implementation could result in more than 56,000 new jobs in the United States, while also driving billions of dollars in domestic investment.
The groups further said the programme has the potential to double U.S. textile exports to the Western Hemisphere, reaching US$29 billion annually. Such growth, they noted, would not only benefit textile mills and manufacturers but also support the wider supply chain, including cotton farming, yarn and fabric production, and downstream apparel manufacturing linked to regional trade partnerships.
The proposal positions trade incentives as a practical alternative to purely punitive measures by tying tariff relief to increased sourcing from the U.S. and its free trade agreement partners in the Western Hemisphere.
Joint submission linked to Section 301 forced labour investigations
The industry groups developed the proposal in response to a textile mechanism suggested by USTR as part of the Section 301 investigations into forced labour-related trade concerns. Rather than focusing solely on tariff penalties, the associations are advocating for an approach that combines enforcement with incentives designed to expand compliant, transparent and regionally integrated supply chains.
In their filing, the groups said the programme would help reopen shuttered factories, support critical new investments and preserve the long-term competitiveness of the U.S. textile industry, while also giving brands and retailers greater flexibility to adjust sourcing strategies.
They emphasised that “with the right incentives” the United States could generate substantial job growth, strengthen manufacturing resilience and support a more balanced regional textile and apparel trade model.
A rare united front across the U.S. textile and apparel sector
The joint submission is notable not only for its policy content but also for the coalition behind it. Textile manufacturers, apparel brands and retailers have often taken sharply different positions on trade policy, tariffs and sourcing rules. The fact that these associations have come together to support a shared framework reflects growing recognition that supply chain resilience, forced labour compliance and regional sourcing diversification are now common priorities across the industry.
By linking tariff credits to purchases of U.S. textiles and qualified apparel goods from Western Hemisphere partners, the proposal aims to strengthen the broader regional production base while creating more demand for U.S.-made fibres, yarns and fabrics.
Focus shifts to USTR response
The proposal now places the spotlight on the U.S. Trade Representative’s Office and whether the administration will consider incorporating the suggested incentive mechanism into any final remedies arising from the Section 301 investigations.
If adopted, the programme could represent a significant shift in U.S. textile and apparel trade policy — moving beyond defensive tariff measures towards a model that uses targeted incentives to encourage domestic manufacturing growth, regional sourcing partnerships and supply chain realignment.
For the U.S. textile industry, the submission represents an attempt to turn trade policy into an industrial growth strategy. For apparel brands and retailers, it offers a potential route to manage tariff exposure while supporting a more resilient and diversified sourcing base across the Western Hemisphere.