Textile Manufacturers Seek Duty Suspensions On Acrylic And Rayon Yarns

U.S. textile manufacturers are pressing Congress to act quickly on legislation that would grant
duty suspensions to imported rayon and acrylic fibers that are not produced in the United States
but are vital to helping them remain competitive with foreign manufacturers.

Duty suspensions on those products expired at the end of last year, and Congress has not
acted to renew them. Although duty suspensions on non-competitive products have been pretty routine
in the past, a new round of suspensions has been caught up in connection with a Republican-led
effort in the House to eliminate so-called earmarks, which have come under fire as “waste, fraud
and abuse.” Earmarks are funds provided by Congress for projects and programs in congressmen’s
districts and often are added to appropriation bills at the last minute without proper

In view of the hang-up, the House Ways and Means Committee is considering taking up duty
suspension requests in two steps — one, which they would hope to enact by the Memorial Day recess,
would extend previously approved suspensions; and a second bill would deal with requests for new
ones. It has not yet been determined whether manufacturers will be reimbursed retroactively for
duties they have been paying since the first of this year.

In a letter to the leadership of the Ways and Means Committee and its Trade Subcommittee, the
National Council of Textile Organizations (NCTO) and 74 companies have strongly urged Congress to
approve the Miscellaneous Trade and Technical Corrections Act, which would suspend the duties on
acrylic and rayon fibers.  NCTO says these are two components of  “major concern” to the
industry. The letter says prices of acrylic fibers have increased by 50 percent, and with a
6-percent duty on top of that, there is a risk that U.S. manufacturers will be shut out of the
market. The same is true for products using rayon fibers, for which there is a duty of 5 to 10
cents per pound.

“Payment of the full duty on acrylic and rayon fibers comes at a very difficult time as the
U.S. industry is facing tremendous market pressures due to the lifting of China import safeguards
in 2009 and Chinese imports have increased dramatically,” the NCTO letter says. “If our industry is
forced to absorb duties on imported rayon and acrylic fibers, many companies will be unable to
remain competitive and will be forced to exit the market for product lines that utilize those

NCTO adds that extension of the expired duty suspensions is “justified and necessary” and
would improve the international competitiveness of the U.S. industry.

May 18, 2010