Supply Chain Resiliency and the Role of Small Manufacturers—U.S. Textile Industry’s Perspective

Witness: National Council of Textile Organizations (NCTO) President and CEO Kim Glas; The full testimony is available HERE

Note:

Berry Amendment: Under a provision of 1941 legislation known as the “Berry Amendment” , the Department of Defense (DOD) must buy clothing, fabrics, fibers, yarns, other made-up textiles, boots, and certain other items that are 100% US-made.  Notably, the Berry Amendment mandates a much higher level of domestic content than the Buy American Act of 1933, which, in general, only requires 50% of the costs of a product to be manufactured in the United States. DOD spent around $1.6 billion on clothing, textiles, and footwear in FY2020 under the Berry Amendment. The items covered by the Berry Amendment have varied over the years. In the FY2017 NDAA (P.L. 114-328), Congress extended the Berry Amendment by requiring DOD to provide 100% U.S.-made running shoes for recruits entering basic training.

Biden’s “Buy America” policy:

  • On January 25, 2021, President Biden issued an Executive Order on Ensuring the Future Is Made in All of America by All of America’s Workers, as part of his “Build Back Better” economic recovery plan. The order created the role of a “director of Made-in-America” within the Office of Management and Budget and increased the threshold and price preferences for domestic goods.
  • Related, on February 24, 2021, President Biden released an executive order (EO) and announced to conduct a 100-day supply chains review on several key US industries, including semiconductors, batteries, strategic minerals, and pharmaceuticals. The review will also cover certain critical business sectors, such as national defense, public health, information and communication technology, energy, transportation, and agriculture. Further, the EO explicitly asks the Secretary of Health and Human Services, in consultation with the heads of appropriate agencies, to submit a report identifying risks in the supply chain of personal protective equipment (PPE). PPE includes textile products like facial masks, gowns and gloves. More comprehensive reform and supply chain strategies are likely to follow after the supply chain review requested by the EO.

Author: Sheng Lu

Professor @ University of Delaware

11 thoughts on “Supply Chain Resiliency and the Role of Small Manufacturers—U.S. Textile Industry’s Perspective”

  1. I find Biden’s “Buy America” policy very interesting. I know that the Trump administration focused on bringing manufacturing back to the US, and I wasn’t sure how this would change once Biden came into office. Before taking this course I had the mindset that the more we manufacture within the US the better. I felt that manufacturing internally not only brought jobs to the US but also ensured quality, human rights, and safety controls over factories. I still believe this to be true, however, I now understand the importance of sourcing from other countries. If a country doesn’t have a competitive advantage in manufacturing something over other counties, then they would be wasting resources to produce it themselves. I like Biden’s policy because rather than focusing on manufacturing all products it focuses on products that we have an advantage in making. I also think it’s extremely important that the US bring health, safety, and PPE manufacturing to the US. After covid-19 we see that this kind of manufacturing is more than an economic issue, but also a health issue. The US should not be stuck in a situation where they can’t get crucial items because trade is closed off or they can’t obtain resources.

  2. I strongly agree with Biden’s “Buy America” because it encouraged the development of American manufacturing to ease domestic price pressures. Under the influence of the epidemic, the US government realized that the lack of manufacturing in key industries could not alleviate internal pressure in a timely manner. For example, the pharmaceutical industry, agriculture and PPE. With the outbreak of the trade war, the import and export of materials have become more and more difficult. At this time, strong internal manufacturing industry and a complete supply chain can solve the current problems faster.

  3. Biden’s “Buy America” policy was a really great step for manufactures in the US to contribute and make the prices decrease and not be as high. This policy was able to encourage lots of US manufacturing. America was really able to step up due to pandemic and create over a million masks over night. China was usually the main source for manufacturing these products but Chine needed to produce so many they didn’t have the time or supplies to create for America too. This is when the US had to step up as a country. Biden’s policy made it clear that they would focus on manufacturing products they had the advantage of producing. The US realized during the pandemic that there was a huge difference in manufacturing for certain products that weren’t as good. These made it harder to help out in a timely manor. When countries don’t have an advantage they waste a lot of time and resources. Being able to bring the PPE manufacturing to the US is very beneficial incase another pandemic or sickness occurs. Its also good to not have to rely on other countries for supplies that are this important or get stuck because they cant manufacture them in time.

  4. Biden’s “Buy America” policy seems to be a great idea. I strongly agree with many of its points. Utilizing the things we produce as an advantage will better us and strengthen our exports. Lastly, this is a way to strengthen economy as well as strengthen the partnership with countries that we trade with.

  5. Though I know that Trump was heavily outspoken about “making America great again”, I believe that Biden appears to be greatly invested in making the US a sourcing powerhouse as well. I think his “Buy America” policy appears to be a great plan which places emphasis on US capabilities and strengthening exports. Additionally, I really like his executive order to reevaluate US supply chains since there has never been a more important time to do so. Finding ways to prepare for the unexpected, making sure PPE is protected, and ensuring operations are ethical are all crucial. The Biden administration seems to be moving in the right direction to help protect frontline workers, factory workers, and consumers alike. Additionally, the Biden Administration is smart to focus on products that the US already has an advantage of making. This is a great place to begin in order to strengthen the nation’s position as an exporter. Ultimately, the US has the capabilities to be a self-reliant country and needs to take the steps to do more on its own. It is unacceptable to leave essential workers and civilians without necessary medical equipment because the US can’t get the products from China. As a prosperous, developed country, the US can and should do better. I think the Biden Administration sees this and wants to not only make the country better for its people but also strengthen international relations so that the country can benefit others as well.

  6. Throughout class we have learned about how trade deals and different policies can impact sourcing and how companies conduct their business. It is no different here. Biden’s “Build America Better” plan would try to improve business here in the US. I just find it surprising that this plan would include looking at sourcing. Early on in his campaign, the Biden administration promised to improve relations with other countries so it would be easier to conduct business. The Trump administration always talked about their “America First” ideology which indirectly led to the trade war with China. I am just a little surprised because it seems that the Biden administration is not going completely away from that idea which they said they were going to do. We have relied a lot on China for PPE during the pandemic, but ramping up PPE production here in the US helped us get through the pandemic but according to the video that seemed to supplement what was being imported from China.

  7. I think Biden’s Buy America policy is very effective due to all the benefits that come along with it. For example, it will bring more jobs to the US which lowers the unemployment rate; it ensures quality, human rights, and safety controls over factories. Biden’s policy focuses on producing where there is an advantage rather than producing all products. Since the pandemic, the US had to learn and adapt to producing the necessary resources in a speedy manner. It is beneficial for the US to learn to fend for themselves since relying on other countries, especially during a pandemic, causes many issues such as delays.

  8. Throughout the semester, it has become evident that the Berry Amendment needs to be revised to preserve the US economy. If the US economy fails, there will be a sudden threat to national security. In Biden’s “Buy America” plan, he seeks to strengthen the nations exports. This executive order will benefit the supply chain. The US-China trade war ultimately resulted in the US losing as the consumer still relied on China for production. At the start of the pandemic, the US relied on China for PPE and the country was able to produce when the US could not. It gave China an advantage over the US. In assuring that PPE among other key industries will undergo a supply chain review, it ensures some manufacturing will be brought back to the US. This will help economy but preserve the people. The pandemic was not something anyone could have foreseen. We were not prepared. The inclusion of PPE in the plan ensures the US will not need to rely on other countries manufacturing.

  9. I am quite surprised that the Biden Administration is for bringing back the “made in America” concept as the Trump Administration did. I understand the significance of being an independent country but after taking this course and understanding how the global supply chain works, I do not think that that would be a good idea. I think that there are other ways that US fashion companies can create jobs for Americans that do not have anything to do with changing where we source apparel and textiles. Doing so could put business underwater and leave them in debt because of the high labor costs we have, compared to Asian countries because we have less people willing to do factory work.

    All in all I enjoyed this class I had some difficulties, but I enjoyed learning about the textile and apparel industry as i am looking into having a career in that field.

  10. One thing I learned in this class is that despite the popular belief, we do manufacture things in the US, and in relation to the T&A industry the US is a huge textile manufacturer and exporter. What I found interesting is this blog post shows how different policies can strengthen and promote this “made in the USA” industry. For example, since the Berry Amendment says the DOD has to buy certain clothing items 100% made in the US this encourages US-made apparel. It was also interesting to learn about Biden’s Buy America policy where he seeks to make the US’s export market stronger by reviewing various supply chains and find which ones we have a stronger advantage in. This relates back to the course where we learned it is more beneficial for countries to produce products they have a comparative advantage in. I think this is a smart way to bring back “made in US” products but make the process economically efficient.

  11. Great thoughts! Agree totally. As our lecture video this week mentions, trade policy is always a political decision that goes far beyond economic gains and losses. However, after reading this news report, I am thinking whether prioritizing PPE production is a smart strategy for the long-term prosperity of the US textile industry: https://www.npr.org/2021/06/25/1009858893/u-s-companies-shifted-to-make-n95-respirators-during-covid-now-theyre-struggling

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