NCTO pushes for new forced labor tariffs and regional sourcing credit system
Apparel Market 2025 to 2032: Tariff Realignment, Fast Fashion Shifts and the Sustainability Mandate →On July 9, 2026, the National Council of Textile Organizations urged the USTR to implement new Section 301 tariffs targeting apparel imports from China and Southeast Asia linked to forced labor. Concurrently, industry trade groups proposed a regional sourcing credit system to offset these potential penalties. This system would reward brands utilizing USMCA or CAFTA-DR trade partners.
Map supply chain exposure to Southeast Asian and Chinese manufacturing hubs
Proactive mapping mitigates compliance risks and potential cost spikes if the proposed Section 301 forced labor tariffs are enacted.
Evaluate nearshoring expansion within USMCA and CAFTA-DR zones
Expanding regional sourcing positions procurement to capitalize on the proposed tariff offset credits while securing supply lines.