In a rare display of bipartisanship, Republicans and Democrats in Congress are joining forces to prioritize the development of a domestic textile manufacturing sector through the introduction of the Americas Trade and Investment Act, also known as the Americas Act. Introduced in March by Sens. Bill Cassidy (R-La.) and Michael Bennet (D-Colo.), the bill aims to expand trade capabilities and incentives between the U.S., Latin America, and the Caribbean while also proposing a substantial $14 billion investment to create a textile and manufacturing domestic circular economy.
The textile industry encompasses a wide range of materials, including yarn, cotton, and wool, which are used in various products such as clothing, car upholstery, and even the seams of baseballs. The potential impact of a truly circular U.S. textile manufacturing sector is immense, and the Americas Act seeks to capitalize on this opportunity.
The proposed legislation focuses on two main objectives. Firstly, it aims to reshore manufacturing supply chains that are currently based in China. To achieve this, the bill suggests imposing increased tariffs on goods imported to the U.S. while simultaneously providing tax incentives to manufacturers that relocate their supply chains to the U.S. This move is intended to boost domestic production and reduce reliance on foreign imports.
Secondly, the Americas Act proposes a 15% tax reduction for any U.S.-based business involved in the collection, reuse, repair, recycling, renting, or processing of textiles. The $14 billion investment is divided into four pools: $10 billion for preferential loans for textile reuse and recycling; $3 billion in grants for textile reuse and recycle, manufacturing support programs and components, and machinery to aid with product transportation and processing; $1 billion for innovation program research and development related to textile use and recycling; and $100 million for a public education program.
Rachel Kibbe, CEO of Circular Services Group and American Circular Textiles Group, has been collaborating with Sens. Cassidy and Bennet on the bill and expressed her enthusiasm for its potential impact. "With the bold textile reuse and recycling incentive provisions in the Americas Act, organizations in our industry will be able to reinvest in jobs in the U.S. and compete globally," Kibbe stated in a recent interview, adding that the bill would foster an environment that cultivates private capital investment.
The introduction of the Americas Act comes at an opportune time, despite the challenges posed by its introduction during a presidential election year. The recent bankruptcy filing of Renewcell, a leading circular textile company focused on producing low-carbon, recycled fabrics for the mass-market fashion industry, highlights the need for support in this sector. On June 4, it was announced that Altor, a Swedish private equity firm, had acquired Renewcell and renamed it Circulose, signaling the potential for growth and investment in the circular textile economy.
As the Americas Act begins its journey through the legislative process, it serves as a testament to the importance of bipartisan cooperation in addressing critical issues such as the development of a domestic circular economy. The bill's proposed investments and incentives have the potential to create jobs, reduce waste, and promote sustainability in the textile and manufacturing sectors. If successful, the Americas Act could serve as a model for future bipartisan efforts to address pressing environmental and economic challenges facing the United States.
