The US Department of Defense procures approximately $4 billion in textiles annually, from combat uniforms to tents. The recently passed 2025 National Defense Authorization Act (NDAA) aims to lock this massive demand firmly within US borders.
Background
The House version of the NDAA strengthens the Berry Amendment, a 1941 law requiring the DoD to prioritize US-grown, -manufactured, or -produced textiles. The new provisions limit the use of waivers and reduce procurement flexibility for overseas sources.
The National Council of Textile Organizations (NCTO) praised the move, citing its role in protecting 120,000 US textile jobs and reducing reliance on foreign supply chains. Notably, US textile imports exceeded $120 billion in 2023, with China accounting for about 25%.
Industry Impact
For export-oriented textile economies, this represents more than just a lost niche market. Military procurement standards often set precedents for civilian markets. Stricter enforcement of the Berry Amendment could trigger a cascade of 'Buy American' policies among federal agencies, state governments, and contractors.
Chinese textile firms face heightened scrutiny on rules of origin. Practices like minor processing to circumvent tariffs will carry greater risk in military procurement. While India and Vietnam may capture some diverted orders, the US localization trend will ultimately constrain their market access too.
For US domestic mills, this is a clear policy win. However, capacity constraints remain: US textile production can only meet 60%-70% of defense needs, with a gap in finished apparel manufacturing. This could lead to a 'willing but unable' scenario post-implementation.
Practical Advice
For Buyers - Reassess supplier mix: If clients involve US federal or military projects, ensure supply chains comply with the Berry Amendment to avoid rejection. - Factor in compliance costs: US suppliers typically price 15%-30% higher, but with lower policy risk; negotiate cost-sharing with clients early. - Develop backup plans: For non-military but sensitive textiles (e.g., firefighting gear, police equipment), consider parallel sourcing of US-certified products.
For Exporters - Shift focus: Reduce reliance on US government orders and pivot to civilian markets or regions like the EU and Middle East. - Strengthen origin compliance: Build internal audit teams to trace raw materials and processing steps for all US-bound exports. - Explore overseas production: If serving US clients is essential, consider assembly or processing in the US or USMCA partners like Mexico.
The long-term impact of this legislation may extend beyond military domains. It signals a clear US intent to reshape textile supply chains from 'efficiency-first' to 'security-first.' Chinese textile firms must shed wishful thinking and proactively adjust market and compliance strategies.