Episode #29: Reshoring and Tariffs: Rebuilding America's Industrial Base with Textiles & Furniture
In this episode of U.S. Manufacturing Today, host Matt Horine dive into the resurgence of the U.S. textiles and furniture industries. Once the backbone of American manufacturing, these sectors were decimated by policies like NAFTA and China's entry into the WTO, resulting in massive job losses and factory closures. We discuss the new wave of targeted tariffs introduced to counteract cheap imports and how automation and reshoring efforts are positioning American manufacturers for a comeback. Listen as we explore the implications for national security, economic stability, and environmental stewardship. Join us in understanding the significance of this industrial reset and stay tuned for more insights from industry experts.
Links
- Navigating Trump 2.0
- Veryable Is Revitalizing U.S. Manufacturing
- Sign Up on the Veryable Platform
Timestamps
- 00:00 Introduction to U.S. Manufacturing Today
- 00:17 The Forgotten Industries: Textiles and Furniture
- 00:35 Economic Reforms and Tariff Strategies
- 01:39 The Decline of American Textile and Furniture Industries
- 02:07 The Impact of Globalization and Policy Decisions
- 03:03 The Devastating Collapse: Facts and Figures
- 04:36 Environmental and National Security Concerns
- 05:29 Seeds of Hope: Reshoring and Automation
- 06:48 The Role of Tariffs in Economic Realignment
- 08:28 Future Outlook and Conclusion
Episode Transcript
Matt Horine: Welcome back to US Manufacturing today, the podcast powered by Veryable, where we talk with the leaders, innovators, and change makers, shaping the future of American industry, along with providing regular updates on the state of the industry, the changing landscape policies and more.
Today we're talking about industries that built America then were offshore and forgotten, textiles and furniture making.
They're often overlooked in the broader context of the defense industrial base, the automotive sectors, steel and others. But they were a critical component to the manufacturing base that has been completely inverted in terms of imports. Most people don't think about where their clothing or their furniture comes from, but I promise over the next few years, textiles and furniture will be on the frontline in the economic realignment of this country, because last week there was a targeted game change of economic reform that manifested in the form of industry specific targets versus basing on porn of origin.
Something that will likely be the next wave of tariff strategy that is byproduct [00:01:00] category versus the country of origin. The administration announced a new round of targeted tariffs, 30% on all upholstered furniture imports, 50% on kitchen cabinets and bathroom vanities. And expanded enforcement against China led dump textile components through Section 3 0 1 enforcement.
So this isn't an isolated jolt, it's part of a broader industrial reset, and the message is pretty blunt. If it's not made in America, it's going to pay up. And unlike the usual policy drip, this wasn't leaked through think tanks, it was done by surprise and was broadcast directly to the working men and women of the Carolinas, Michigan, and Pennsylvania, places that used to build this stuff.
Now why this matters and why it's the industry. We forgot America used to dominate textiles and furniture making. In 19 60, 90 5% of our clothing was made in the us. Today, 97% of our clothing is imported. Textiles weren't just a sector, they were the heartbeat of states like the Carolinas, Georgia, Alabama, Michigan, Tennessee.
[00:02:00] Whole towns ran on spinning frames in cutting tables. High point. North Carolina wasn't just a city, it was the furniture capital of the world. Then came nafta, then came China's entry into the World Trade Organization and then came the lie. Cheaper imports means more choices for Americans. What it really meant was this factories closed down.
Generations of skilled workers were pushed out, the communities around them collapsed, and we repla, we replaced $25 an hour mill jobs with $2 an hour overseas labor. This isn't just about jobs, it's about dependency. So again, in 1994, NAFTA was enacted. In 2001, China entered the World Trade Organization, and within a decade over 600,000 textile and apparel jobs vanished. Entire towns were hollowed out wages collapsed. And it wasn't an accident, it was policy. It was Wall Street saying [00:03:00] efficiency while Main Street paid the price. So let's dig into the collapse phase, or what we could call the collapse phase and the real numbers that nobody wants to talk about out loud because it's devastating.
America went from 1 million textile jobs in 1990 to fewer than 350,000. Today, a 65% collapse in one generation. In 1960, 95% of U.S. clothing was made domestically.
Today, 97% is imported. That's a 192 point swing. 30,000 plus U.S. textile and apparel factories closed between 1990 and 2010 in North Carolina. Once the heartbeat of U.S. textiles, over 200,000 workers lost their jobs between 1996. And 2006, some textile jobs went overseas for as little as 12 to 30 cents an hour at the time.
And at one point, Bangladesh garment workers were averaging $38 a month in wages. One single factory in China today produces more t-shirts [00:04:00] per year than the entire U.S. textile sector combined. Just how much did we outsource? The U.S. now runs a $120 billion plus annual trade deficit on textile and apparel.
One company in China ships more garments to the U.S. per day than all U.S. clothing makers combined produce in a month. Over 1 billion garments enter the U.S. every year through de minimus loopholes, meaning no tariffs, no inspections, no oversight, and the average American buys 68 new garments a year. Fewer than three of those will be made in America.
There's also some dependency issues on this based on national security. The U.S. military consumes over 200 million square yards of fabric annually, yet only a fraction of it is American made. Despite Barry Amendment laws hospital and institutional textiles, like sheets, scrubs, curtains are now 70 to 90% foreign sourced, putting healthcare supply chains at risk in wartime and the environmental [00:05:00] devastation that's hidden in the cheap clothing.
The global textile industry is responsible for 20% of industrial water pollution. 35% of all microplastics in oceans come from synthetic clothing like polyester fleece, and one in every three garments globally is never worn. They go straight to the landfill and something that we've mentioned earlier on this show, but much of the Pacific garbage patch is textile runoff.
It's not soda bottles. It's not plastic bottles. It's textile runoff. So where are the seeds of hope? In this, there is a little bit of a comeback story building up U.S. textile exports are quietly rising up about 30% since 2019. Thanks to reshoring efforts and some regionalization of those efforts.
Automation flips the math on this. A modern U.S. automated cutting and sewing line can now produce with one 10th of labor that it took in 1990, making us plants competitive even at $25 an hour. Wages, there are some gaps though our government still buys foreign. And here's the part that should be concerning.
[00:06:00] The military is one of the largest textile consumers on earth. Uniforms, webbing, tents, parachutes, canvas, flame resistant gear, ballistic fabric, bedding, tarps, even the belt webbing and Velcro, let's call it what it is. When 97% of our clothing is imported, we do not control our supply chain. We don't control the pricing.
We don't control quality, we don't control the moral issues around it, on wages, and we don't control our sovereignty. A huge portion of these goods are made with really low, almost slave labor wages, often under regimes with no environmental or labor standards. And meanwhile, while the U.S. military does consume thousands of tons of textiles, we are beginning a quiet reshoring on that front because if your uniforms are cut and sewn in China, your supply chain is compromised.
It's not just economics, it's national security. So a big question that we've addressed in the past is will tariffs spike inflation? That's the big fear. Tariffs will make everything more expensive. But here's the truth, these tariffs are not inflationary, especially in the long run. [00:07:00] They hit the goods part of this, not the services.
Services is where that starts to creep in a little bit around with those concerns. But they're one-time adjustments, not endless escalators. One-time shifts. They're not perpetual. And once a duty is built in, future inflation pressures are muted. Even now on the short run, we're only seeing that as one 10th of a percentage point in terms of inflation.
As domestic supply rebuilds, competition pushes prices down as U.S. capacity scales up. Domestic supply begins to take pressure off the imports, reducing exposure to overseas volatility and critically tariff revenue becomes capital for reshoring programs. Strategic targeting, not blanket taxation. These tariffs were aimed at sectors where U.S. capabilities still exist.
Something that's critical to reindustrialization starting where we're already ahead rather than bill blind. Taxes on consumers and consumables, we've now crossed a hundred billion plus in tariff revenue year to date. That's money that stays in America rather than bleeding out to our geopolitical adversaries.
There are also some glimmers of hope in the [00:08:00] automation game. It does change the equation. Cutting and sewing are becoming more automated. Furniture frame routing is now CNC standard. So when someone says We can't bring textiles back, the labor's too expensive. The real answer is we don't have to match their labor.
We can leapfrog it A modern plant in North Carolina using these types of automations and flexible. Labor pools can outproduce a 2000 person factory in Vietnam with 50 U.S. workers on average earning real wages. So the tariff wave is just the beginning. This is the first shot in a broader reshoring campaign.
Expect more section 232 investigations on Chinese plywood and MDF frames. Expanded scrutiny on Deminimis micro shipments from Shein and Temu and pressure on big box retailers who profit off of substandard labor, who would rather give the work out than build in their own communities. You can some feel the shift.
So over the next couple weeks, we promise to bring on guests who have more insights into textiles, a parable and furniture making to provide insights. And from [00:09:00] people who are actually doing the work in building not lobbyists or consultants or academics, the people who are actually doing the work, we're really excited about that.
Matt Horine: To stay ahead of the curve and to help plan your strategy, please check out our [00:26:00] website at www.veryableops.com and under the resources section titled Trump 2.0, where you can see the framework around upcoming policies and how it will impact you and your business. If you're on socials, give us a follow on LinkedIn, X, formerly Twitter, and Instagram. And if you're enjoying the podcast, please feel free to follow the show on Apple Podcasts, Spotify, or YouTube, and leave us a rating and don't forget to subscribe. Thank you again for joining us and learning more about how you can make your way.