The U.S. textile industry is launching a new offensive against import fraud. On June 10, the National Council of Textile Organizations (NCTO) publicly endorsed a letter sent by the House Textile Caucus to the Department of Homeland Security (DHS), demanding a concrete plan to combat customs fraud and circumvention in textile trade.
Background
The NCTO’s statement is no isolated event. The organization, representing the full U.S. textile supply chain from fiber to finished sewn products, emphasized in its endorsement that current customs enforcement has significant loopholes—some importers underreport values, misdeclare origins, or falsify fiber compositions to evade anti-dumping duties and quota restrictions. The House Textile Caucus letter explicitly calls on DHS to develop a "comprehensive enforcement plan" and recommends enhanced inter-agency data sharing and inspection frequency.
Timing is strategic: the letter arrives mid-year, just as Congress reviews the next fiscal year’s budget. Industry lobbying groups are leveraging this window to push for dedicated enforcement funding. The NCTO’s backing amplifies the weight of this demand, as its members include the majority of domestic spinners, weavers, dyers, and apparel manufacturers.
Industry Impact
For textile supply chains exporting to the U.S., the signal behind this letter is more significant than the letter itself. If DHS adopts the requested measures, the first targets will be origin certification audits—especially for goods routed through Southeast Asia, the African Growth and Opportunity Act (AGOA) channel, and the Central America-Dominican Republic Free Trade Agreement (CAFTA-DR).
High-risk categories include polyester filament fabrics, blended yarns, and low-end apparel, which have historically been prone to misdeclaration. Over the past three years, U.S. Customs and Border Protection (CBP) has issued multiple penalty cases for false origin claims, with amounts ranging from hundreds of thousands to millions of dollars. If DHS implements a comprehensive enforcement plan, CBP could raise random inspection rates from under 5% to over 10% and introduce stricter third-party testing protocols.
Practical Recommendations
For Buyers - Re-audit supplier origin documents to ensure traceability of fiber composition and processing steps for every shipment. - For orders routed through third countries, require full processing records and shipping bills of lading to avoid detention due to "false transit." - Monitor recent CBP enforcement cases targeting specific categories (e.g., polyester woven fabrics, cotton knit shirts) and adjust sourcing strategies accordingly.
For Exporters - Include compliance guarantee clauses in export contracts, making sellers liable for detention or penalties caused by misdeclaration. - Coordinate with customs brokers to proactively seek advance rulings for high-sensitivity categories (e.g., synthetic products, blended goods) to reduce post-entry disputes. - Track follow-up actions by the NCTO and House Textile Caucus; if DHS issues new regulations, adapt internal processes within 30 days.
The current lobbying push reflects a renewed contest between domestic capacity and import supply chains. For Chinese and Southeast Asian exporters, compliance costs are set to rise, but supply chains that invest early in transparency may gain a trust premium from buyers.