When the COVID-19 pandemic hit a year ago, even textile manufacturers felt its impact almost immediately.
Companies saw their orders canceled overnight, and production stalled as lockdowns that were necessary to contain the spread of the virus went into place, said Kim Glas, the president and chief executive officer of the National Council of Textile Organizations.
Since then, the industry has worked to reorient itself somewhat by shifting production to personal protective equipment. But as the pandemic persists, textile manufacturers are looking for policies to support them, as well as relief during the crisis, she said.
President Joe Biden’s administration has so far advanced steps to potentially shore up domestic manufacturing and to address the ongoing public health and economic devastation of the pandemic. More than 466,500 people in the U.S. have died from COVID-19, with more than 27 million confirmed cases to date in the country.
The president has issued an executive order to review potential loopholes in the Buy American Act, which since the 1930s had called for the U.S. government to prioritize domestic manufacturers for government contracts. President Biden has also has pushed to use the Defense Production Act, which allows presidents to direct government agencies to speed up the production of necessary supplies including PPE and vaccines.
Glas shared her perspective on the textile industry’s experience during the pandemic, and what manufacturers want to see from the new administration.
WWD: At this stage in the pandemic, what are some of the biggest challenges for the domestic textile industry as it works to recover from the supply chain disruptions and shifts in demand for clothing and apparel?
Kim Glas: The industry pivoted to making gowns, and masks and testing kits, and all sorts of products that were necessary, [but it isn’t] clear what the path forward is for onshoring these domestic supply chains.
President Biden is talking about this as a key priority, and we applaud him for making it one of the pillars of the “Build Back Better” initiative. But right now, we don’t have long-term contracts with the federal government. We don’t understand, maybe, what are some of the private incentives to help ensure that the PPE supply chain, which normally is sold on the commercial market, what are ways that we can incentivize that to ensure that they are sourcing products from domestic manufacturers?
There’s key parts of the equation that need to be figured out about whether and how we onshore this critical supply chain long-term, so that we are not beholden to complete foreign supply chains, and, obviously, a lot of the production for PPE was centered in China.
We’re eager to work with the Biden administration and Congress to figure out what relief is possible. But part of us wants to make sure the relief actually leads to job growth long-term, and that’s why we’re pushing for onshoring domestic PPE production, as well as strengthening our “Buy American” rules.
WWD: What are some policies you’re expecting to see from the Biden administration to jump-start parts of the industry that have been hurt the most? And, along those lines, what would President Biden’s “Made in America” push do support domestic manufacturers?
K.G.: I think President Biden moved forward with a really important step by signing the “Buy American” executive order, to identify what are the loopholes in federal procurement policy.
The other important thing that he outlined in his executive order is, he said that there needed to be a designated person at the Office of Management and Budget who was helping ensure that the federal contracting process was uniform in the implementation of “Buy American.”
That is very important, because the OMB is a critical brain trust within any administration on its budget. And [it is important to have] a uniform point person and a process associated with it to ensure that agencies are actually implementing the next phase of his executive order, which will probably be outlining the “Buy American” strategy for all the agencies, including how to close the loopholes.
I would be remiss to not say that this also requires legislation on the hill. This is one of the few areas I think there could be strong bipartisan support for using the Defense Production Act, utilizing and closing “Buy American” loopholes, and to help bolster the manufacturing and industrial base here in the United States.
WWD: The Biden administration is also pursuing a $1.9 trillion stimulus package. What are you expecting to see from the next stimulus package that would be of particular significance for American manufacturers?
K.G.: We are still figuring out what the details of the package look like. It’s going through the market process right now. But we understand that the White House and the administration is pushing forward with ramping up PPE production here in the U.S. by additional funding for the Defense Production Act, which would essentially ramp up critical supplies and end products necessary to fight COVID-19.
We’re strong supporters of the Defense Production Act, because it’s a way to give long-term contracts and other incentives to domestic manufacturers to make these products, and this will help the industry purchase necessary equipment and rebuild some of their operations.
We have been advocating for Congress to prioritize, when the federal government is making contracts, that they make contracts to domestic producers first, who are making full “Made in America” products. So it will be very important for us to review the language of the $1.9 trillion stimulus package.
In terms of the other elements, it is seen as a relief package for workers and Americans who’ve been hard hit in terms of the child-care credit they receive, and what additional stimulus checks they may receive. Those are all important elements right now.
WWD: In terms of trade policy, what is NCTO’s overall philosophy on what the U.S. stance should be, and are there any specific measures you’re expecting from the administration and the U.S. Trade Representative’s office in 2021?
K.G.: The industry is really excited about Katherine Tai’s nomination to be U.S. Trade Representative. We have worked with her over the years, and as the chief trade counsel for the House Ways and Means committee, she was a very inspired choice by President Biden, because she has a worker-centric approach to trade, and has worked across constituencies in Congress to build consensus around key trade measures.
The big question in our industry’s mind is, what is our approach to China moving forward? Our industry has always taken the approach that in order to get the Chinese to address massive subsidies and other trade inequities, including some of the most egregious forced labor practices ever documented in Xinjiang, we need to take an aggressive approach with China on areas of the economy that are important to them. And one of their top exports to the United States are finished textile and apparel products.
The Trump administration levied tariffs, we’d like to continue to see tariffs on finished products into the U.S. market. We think it’s an opportunity to pivot the supply chain out of China and into other countries that use U.S. inputs, and that would be our Western hemisphere trade agreement countries.