USTR Launches Tariff Exclusion Process for China-Made Textile Production Machinery
Kate Nishimura
5 min read
Bolstering the Biden Administration’s efforts to put American manufacturing back on the map, the U.S. Trade Representative (USTR) has announced the launch of a Section 301 duty exclusion process for certain manufacturing machinery made in China.
In keeping with the president’s direction, the USTR-driven process covers specific equipment deemed essential to domestic manufacturing. Aimed at boosting the onshore production of a number of critical industrial products like solar cells, the list also includes spinning, knitting, weaving and sewing machines integral to the activities of the textile industry.
The docket for submitting requests for exclusions opened Oct. 15 on USTR’s website, and the deadline for submissions closes on March 31, 2025.
According to National Council of Textile Organizations (NCTO) CEO and president Kim Glas, the newly implemented exclusion process stands to provide welcome financial relief to U.S. textile businesses aiming to augment their capabilities and capacity for stateside manufacturing.
“NCTO has strongly supported the China 301 tariffs, but in our all of our discussions with USTR and in comments that we have made over a number of years, there are a very fine number of products where exclusions make sense—because we do not make certain things in the United States,” Glas told Sourcing Journal. “This is one of the very few exceptions we have long asked for, and we were pleased that the Biden administration announced a process for exclusions of machinery.”
According to Glas, the high cost of textile production machinery made in China—often in the tens of thousands of dollars—means that it’s subject to high duty rates. NCTO members in states like North Carolina, Georgia and Ohio are forced to pay an added premium on that expensive equipment, putting them at a disadvantage to offshore competitors also purchasing the same products from China, she believes.
There’s no domestic avenue for the purchase of these machines, nor are there many third-country options, Glas said. “Regrettably, a lot of the manufacturers of textile machinery are housed in China,” she added. And as the textile sector strives to stay abreast of the most innovative technology available to achieve greater efficiency and cost savings, the turnover on equipment is high.
The announcement comes at a fortuitous moment for textile players on the East Coast. “With Hurricane Helene hitting a key corridor of U.S. textile production, textile manufacturers are looking to reinvest, especially if there’s damaged equipment as a result,” she said. A number of NCTO members reported suffering physical blows to their businesses following the natural disaster.
Whatever the reason for their interest in new machinery, NCTO is advising its members to file exclusion requests for the products they might want to invest in—even if they aren’t prepared to do so immediately. “Don’t just look at the horizon right now, over the next few months or the next year. Start thinking into the future for the next five to 10 years,” Glas said.
Exclusions that are approved by USTR have the potential to remain on the exclusion list throughout the duration of the Section 301 tariffs, and the NCTO lead urged U.S. textile manufacturers to “have the forethought to request that equipment and justify it” before the deadline for submissions in March.
The results of the upcoming presidential election may also play a role in the continuation of this exclusion process and will almost certainly impact U.S. trade relations with China in the coming months and years.
The list of textile manufacturing items covered under the exclusion process, which can be found under chapters 84 and 85 of the Harmonized Tariff Schedule, is extensive. It includes textile spinning machines, looms for weaving fabric, power looms, circular knitting machines, flatbed knitting machines, warp knitting machines, embroidery machines, sewing machines, spindles, dobbies, jacquards, certain types of needles, machines for making felted hats, washing, bleaching or dyeing machines for yarns and fabrics, and more.
Glas said NCTO was satisfied with the volume of products eligible for exclusion, but the textile industry trade group is now pushing to see retroactive rebates for manufacturers that purchased eligible machinery before the exclusion process began this month. The group would also like to see the period for exclusion requests extended beyond the current March deadline to give American manufacturers more time to formulate their requests.
“We’ve been long advocating for this; we want to invest here,” Glas said. “We’re happy that they are moving forward with this process and we’re going to be deeply engaged in it. It matters a great deal for our industry.”
Certain equipment made for footwear manufacturing, too, like sewing machines designed to join footwear soles to uppers, machinery for preparing, tanning or working hides, skins or leather, and machinery for making or repairing footwear, are also eligible for exclusion from Section 301 tariffs.
Alex Zar, owner of Los Angeles premium footwear and handbag factory Lalaland, said the limited list of footwear-related products doesn’t have the potential to impact his business, though he relies on advanced manufacturing processes and technology brought in from overseas.
“They are only some sewing machines listed there, for direct-sole-attachment sewing,” he said. The factory uses direct-soling injection molding machines from German machinery firm Desma, among other technologies sourced from Europe.
“We’re keeping a close eye on the new tariff program, especially since we source some of our flat-bed knitting machines and needles from China,” Garrett Gerson, founder and CEO of Malibu, Calif.-based Variant 3D, a 3D-knitting technology provider that works with footwear, apparel, and automotive companies, told Sourcing Journal. “If it presents cost-saving opportunities, we’d be eager to leverage them to improve efficiency and reduce costs.”
Requesters are required to provide thorough information about their organizations, as well as detailed descriptions of the manufacturing equipment in question, including its dimensions and its function. They must also indicate whether the machinery is subject to any antidumping or countervailing duty order issued by the U.S. Department of Commerce, or whether it is available within the U.S. or from a third country, among other criteria.
Following a request submission, other interested parties will have 30 days to respond to the request and indicate their support or opposition.
