The National Council of Textile Organizations (NCTO), the primary trade association representing the full breadth of the United States textile supply chain from fiber production to finished sewn goods, issued a formal statement on June 10, 2026, expressing strong support for a new legislative initiative aimed at protecting domestic manufacturing. The organization specifically lauded a letter spearheaded by the House Textile Caucus and addressed to the Department of Homeland Security (DHS). This correspondence, led by a bipartisan coalition of lawmakers, demands immediate and aggressive action to curb customs fraud, illegal transshipment, and various trade abuses that have long undermined the economic stability of the American textile sector.
The letter, addressed to DHS Secretary Markwayne Mullin, highlights a critical juncture for the industry. Lawmakers argue that the integrity of U.S. trade policy is fundamentally tied to the rigor of its enforcement. For decades, domestic manufacturers have contended with an uneven playing field created by foreign entities that bypass tariff structures and exploit regulatory loopholes. The House Textile Caucus, under the leadership of Co-Chairs Representative David Rouzer (R-NC) and Representative Adriano Espaillat (D-NY), along with 14 additional signatories, is calling for a paradigm shift in how the U.S. Customs and Border Protection (CBP) monitors and penalizes trade violations.
A Strategic Mandate for the Department of Homeland Security
The bipartisan appeal to Secretary Mullin emphasizes that the effectiveness of the nation’s tariff structures is currently being compromised by sophisticated fraud schemes. As Secretary Mullin begins his tenure, the House Textile Caucus has urged him to prioritize a comprehensive review of the CBP’s operational orientation. The goal is to ensure that the agency is not only equipped with the necessary technology and personnel but also possesses the mandate to fully enforce existing customs laws without reservation.
Central to the lawmakers’ request is the development and institution of a "comprehensive textile enforcement program." This proposed framework is designed to move beyond passive monitoring toward a more proactive and punitive stance against bad actors. Key components of the requested program include:
- Revocation of Trade Privileges: Lawmakers are calling for the immediate suspension of "de minimis" and other trade privileges for companies found to be engaging in systematic fraud.
- Public Accountability: The letter suggests the creation of a public list identifying repeat offenders, thereby using reputational risk as a deterrent.
- Enhanced Penalties: Implementing significantly higher financial penalties to ensure that the cost of non-compliance outweighs the potential profits of illegal trade.
- Scientific Verification: An increase in laboratory testing, such as isotopic fiber analysis, to verify the origin of raw materials and ensure they do not originate from regions associated with forced labor.
- Rigorous Audits: A mandate for increased audits of Free Trade Agreement (FTA) claims to ensure that goods claiming duty-free access under agreements like USMCA or CAFTA-DR actually meet the strict "yarn-forward" rules of origin.
The Economic Toll of Customs Evasion
The urgency of this legislative push is underscored by the significant economic contributions—and current vulnerabilities—of the U.S. textile industry. As of 2026, the sector remains a vital component of the American industrial base, supporting over 500,000 jobs across the supply chain, from cotton farms in the South to high-tech non-woven fabric plants in the Northeast.
According to data cited by industry analysts, illegal trade practices, including the undervaluation of shipments and the misclassification of goods, cost the U.S. Treasury billions of dollars in lost tariff revenue annually. Furthermore, the "de minimis" loophole—which allows shipments valued under $800 to enter the country duty-free and with minimal scrutiny—has seen an exponential increase in volume over the past five years. This surge has provided a convenient veil for illicit goods, including textiles produced with forced labor or those that circumvent anti-dumping duties.
NCTO President and CEO Kim Glas emphasized the gravity of the situation in her supporting statement. Glas noted that customs fraud is not merely a bureaucratic issue but a direct threat to American livelihoods. "These illegal trade practices cost American jobs, undermine legitimate manufacturers, weaken our trade agreements, and deprive the U.S. Treasury of billions of dollars in revenue," Glas stated. She highlighted that without a level playing field, even the most efficient American plants cannot compete with foreign entities that operate outside the law.
Historical Context and the Evolution of Trade Challenges
The call for heightened enforcement comes after a tumultuous decade for the global textile trade. Following the disruptions of the early 2020s, the U.S. textile industry saw a brief resurgence driven by "nearshoring" and a renewed focus on supply chain resilience. However, this growth was quickly met by increasingly sophisticated efforts by overseas competitors to bypass U.S. trade barriers.
In 2021, the implementation of the Uyghur Forced Labor Prevention Act (UFLPA) set a new standard for supply chain transparency. While the UFLPA was a landmark achievement, enforcement has remained a monumental task for the CBP. Foreign manufacturers have frequently used "transshipment"—the practice of routing goods through an intermediary country to disguise their true point of origin—to avoid both UFLPA restrictions and Section 301 tariffs.
The House Textile Caucus’s letter represents the latest in a series of escalations by U.S. officials to address these "whack-a-mole" tactics. By demanding a centralized and comprehensive enforcement program, lawmakers hope to move away from piecemeal responses toward a unified strategy that encompasses all aspects of textile trade.
Industry Reactions and Broader Implications
The response from the manufacturing community has been one of cautious optimism. Textile mill owners in states like North Carolina, Georgia, and South Carolina have long argued that their survival depends on the government’s ability to police the border effectively.
"We are not asking for protectionism; we are asking for the law to be followed," said one industry executive based in the Southeast. "When a competitor can ship a finished garment into the U.S. through a loophole without paying a cent in duties, while we pay taxes, follow environmental regulations, and pay fair wages, the system is broken."
The implications of this enforcement push extend beyond the textile industry. If the DHS adopts the requested measures, it could serve as a blueprint for other sectors—such as electronics and steel—that face similar challenges with customs fraud and de minimis abuse. Furthermore, a crackdown on illegal transshipment would strengthen the value of U.S. Free Trade Agreements. Agreements like CAFTA-DR are designed to foster a regional supply chain; when illegal Asian textiles are smuggled through these partner countries, it devalues the benefits intended for legitimate regional partners in Central America.
Analysis of Potential Policy Shifts
Should Secretary Mullin and the DHS act on the Caucus’s recommendations, several significant shifts in the trade landscape are likely to occur:
- Supply Chain Re-Routing: Companies that have relied on questionable shipping routes or "de minimis" high-volume strategies may be forced to restructure their logistics, potentially leading to a higher demand for domestic or Western Hemisphere production.
- Increased Costs for Non-Compliant Importers: Enhanced penalties and the threat of being "blacklisted" will significantly raise the risk profile for importers who do not perform due diligence on their suppliers.
- Technological Integration at the Border: The push for increased lab testing will likely lead to greater investment in forensic technology at ports of entry, allowing for real-time verification of fabric content and origin.
- Transparency in Enforcement: The demand for the timely publication of enforcement statistics will allow trade associations like the NCTO and members of Congress to hold the DHS accountable for its progress, or lack thereof.
A Bipartisan Front for Domestic Manufacturing
The leadership of Reps. Rouzer and Espaillat underscores the bipartisan nature of the textile issue. While their districts represent vastly different economic landscapes—one rural and manufacturing-heavy, the other urban and fashion-focused—the underlying goal remains the same: protecting the integrity of the American market.
Representative Rouzer has frequently cited the importance of the textile industry to national security, particularly regarding the production of military uniforms and personal protective equipment (PPE). Representative Espaillat has focused on the labor aspect, ensuring that American workers are not forced to compete with state-subsidized or forced labor from abroad.
As the DHS evaluates these requests, the textile industry remains in a state of high alert. The upcoming months will be telling as the agency decides whether to implement the "comprehensive textile enforcement program" demanded by the House. For the NCTO and its members, the message is clear: the future of American textile manufacturing depends not on new laws, but on the vigorous and uncompromising enforcement of the ones already on the books.
The industry looks forward to a collaborative relationship with Congress, the DHS, and the CBP to ensure that the "level playing field" often discussed in Washington becomes a reality for the factory floors across the United States. With billions of dollars and hundreds of thousands of jobs at stake, the resolution of this enforcement crisis remains one of the most pressing trade issues of 2026.
