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US textile, apparel trade bodies voice concerns over Trump tariffs on Mexico

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The American Apparel & Footwear Association (AAFA) and the National Council of Textile Organisations have penned a letter to US President Donald Trump, expressing their concern regarding the recently proposed tariff hike on Mexican imports and warning the move will hurt US workers and consumers.

On 30th May Trump outlined a plan to ramp-up tariffs on Mexican goods if illegal immigration is not checked.

The US will impose a 5% tariff on all Mexican imports from 10th June and duties of up to 25% will be added in the coming months if Mexico does not take action to ‘reduce or eliminate the number of illegal aliens’ that travel into America.

If the crisis persists, the tariffs will be raised to 10% on 1st July, increased to 15% on 1st August, to 20% on 1st September and to 25% on 1st October 2019.

In a letter to Trump opposing the proposed tariff escalation, heads of the AAFA and the National Council of Textile Organisation said the tariffs would hurt US workers.

‘Currently, hundreds of thousands of American workers are deployed in production and other key value chains that depend on the North American trade partnership with Mexico, which is the market for half of all US textile imports.’

Mexico is the eighth largest supplier of apparel and the seventh largest supplier of footwear to the US market. It is also the largest supplier of men’s and boy’s jeans to the US – accounting for 35% of imports. Similarly, the magnitude of the trading relationship with Mexico is significant for the US textile industry, representing $12.2bn in two-way textile and apparel trade in 2018. The US textile industry alone exported $4.7bn in yarn and fabrics to Mexico last year and had a net export surplus of $3.8bn – making Mexico the single largest market for US-made textile exports.

‘AAFA and NCTO often have different ideas when it comes to trade policy, however, we are united in opposition to the proposal to add tariffs to our products.’ Said Rick Helfenbein, President and CEO of the American Apparel & Footwear Association. ‘Potential tariffs on Mexico are an unwelcome and unnecessary tax on American workers and consumers at a time when we should be focusing on the ratification of the USMCA. Mexico is the eighth largest supplier of apparel and seventh largest supplier of footwear to the US market, with 35% of men’s and boy’s jeans and 15% of work boots coming from south of the border. This move threatens our trade relationship with Mexico and the competitive advantage that supports hundreds of thousands of American jobs in the apparel, footwear, travel goods and textile industries. We do not believe that immigration policy and trade policy should be cut from the same cloth.’

NCTO President and CEO Kim Glas, added ‘NCTO is joining with AAFA today in urging President Trump to refrain from imposing tariffs on US imports from Mexico, an issue that is critically important to our integrated Western Hemisphere supply chains. Mexico is the top export market for US fibre, yarns and fabrics and adding tariffs on Mexican imports of apparel and home furnishing will only hurt the US textile industry’s growth and competitiveness and jeopardise jobs in both countries.

‘Further, these planned tariffs disrupt and distract congressional passage of the pending US-Mexico-Canada Agreement (USMCA), a key administration priority, which not only strengthens the textile industry’s existing supply chain and our free trade partnership with Mexico, but also helps to expand it. We urge the administration to support American workers by not imposing tariffs on US imports from Mexico and helping get USMCA over the finish line.’

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