US NDAA Strengthens Berry Amendment: Implications for Chinese Textile Exports

The rope of 'localization' in the U.S. defense supply chain is tightening. The National Council of Textile Organizations (NCTO) has publicly welcomed provisions in the House version of the National Defense Authorization Act (NDAA) that aim to strengthen the enforcement of the Berry Amendment. For China's textile industry, this is not a distant policy text but a tangible barrier that directly impacts the flow of military and government procurement orders.

The Berry Amendment: From Preference to Mandatory Procurement

The core logic of the Berry Amendment is straightforward: it requires the U.S. Department of Defense to procure specific textile items (such as uniforms, tents, and parachute cords) that are 100% grown, spun, woven, and finished in the United States. The NDAA provisions lauded by the NCTO are designed to close loopholes in past enforcement, such as imposing stricter definitions of 'Made in USA' and increasing penalties for contractor non-compliance. This means that previous practices of importing fabric or semi-finished goods and completing the final steps in the U.S. to claim compliance will face significantly higher costs and legal risks.

Direct Impact on Chinese Supply Chains: Government Order Channels Narrow

While the Berry Amendment primarily targets defense procurement, its spillover effects are significant. The U.S. federal government spends billions of dollars annually on textiles, with high demands on quality, delivery, and supply chain security. Chinese textile enterprises have indirectly participated in this market by supplying fabrics or finished products to U.S. contractors. With the NDAA strengthening localization requirements, this indirect channel will be substantially narrowed. For domestic companies focused on exporting military, protective, or government project textiles, this market contraction is a reality that must be faced.

Industry Impact: A Signal for Global Military Textile Supply Chain Restructuring

The deeper implication is that this could serve as a bellwether for global supply chain restructuring. The U.S. is not acting alone; NATO and other allies are also promoting similar 'localization' policies for defense procurement. While China remains the world's largest textile producer with strong competitiveness in the conventional civilian market, geopolitical factors are overriding cost advantages in the highly sensitive defense and government supply chain sector. Texworld predicts that over the next five years, the global military textile supply chain will develop a 'dual-track' system: civilian markets will maintain global competition, while military/government procurement markets will accelerate toward regionalization and localization.

Practical Recommendations

For Foreign Trade Enterprises - Carefully assess existing orders involving U.S. government or military end-use. Proactively communicate with clients about changing compliance requirements to avoid fines or blacklisting for violating the Berry Amendment. - Diversify market focus: Shift sales emphasis toward civilian high-end markets (e.g., outdoor, functional apparel) or non-U.S. government procurement systems in other countries (e.g., defense projects in the Middle East or Southeast Asia). - Strengthen origin documentation management: Be aware of increasingly strict U.S. Customs enforcement against attempts to circumvent restrictions through third-country transshipment or deep processing.

For Factories - Increase the proportion of non-government orders, especially from civilian brand clients in Europe, Japan, and South Korea, to disperse policy risk. - Monitor the 'nearshoring' trend: If conditions permit, consider establishing factories in Mexico or Central America, which have free trade agreements with the U.S., to re-enter the U.S. government procurement system through rules of origin. - Build an internal compliance audit team dedicated to tracking annual changes in the U.S. NDAA and Berry Amendment to ensure exported products do not cross regulatory red lines.