Hit hard by the pandemic, America’s apparel manufacturers are moving away from the Trump administration’s ‘America First’ Biden’s ‘Buy American’ policy. As per a McKinsey report, 71 per cent of America’s small businesses were negatively impacted by the pandemic and this once again brought into sharp focus the inadequacies in supply chains.
Carbon neutrality by 2050
The Biden administration aims to build tighter procurement and build supply chain resilience to make the country self-reliant in critical raw materials. As a per Innovation in Textiles report, it is currently focusing on addressing climate issues like rejoining the Paris climate accord and revoking permits for the Keystone XL pipeline scheduled to run from Canada to US along the West coast.
The administration also aims to achieve carbon neutrality by 2050 by accelerating its move to renewable energy, says John Kerry, Biden’s special envoy for climate. Gina McCarthy, the President’s domestic climate advisor said the government aims to use the Federal budget and its procurement opportunities to inform the market about technologies and products that need to be built in the country.
US textile and apparel manufacturers are also focusing on environmental and social impacts of domestic and imported goods. Manufacturers are embracing new sustainability initiatives as can be seen from industry conferences and trade shows such as the IFAI’s annual Expo. American suppliers are also focusing on eco-friendly partnerships such as opening Hohenstein, a top European service provider and manufacturer opening an US office. The country also sees digital innovation as essential for achieving a transparent supply chain.
Change in shipping rules
Making a cautious move, the Biden administration is building international partnerships without disturbing existing tariffs and other trade barriers. However, it needs to give attention to rising shipping costs which have increased by almost 300 per cent in the past 12 months, says the FBX Freightos Baltic Index. Special attention needs to be paid to the Jones Act that requires goods shipped within the country to be transported using vessels built, owned and operated by American citizens or permanent residents. Europe and other trade partners have been urging the US government to make changes in this Act and allow greater competition and lower costs. The government seems to be focusing on building domestic manufacturing capability, stronger environmental laws but retaining tariffs. It can also gain from building mutually beneficial partnerships.