An Analysis of the US Textile Market: Trends, Growth, and Global Impact

Jan 10, 2025 Viewd 20

The US textile market is a key component of the global textile industry, with deep historical roots and significant influence on the global supply chain. Over the last two decades, the market has undergone a significant transformation, driven by changes in production methods, shifting trade relationships, and evolving consumer demands. In this article, we will explore the key aspects of the US textile industry, including its historical development, current market structure, economic contribution, trading partners, and the political and geopolitical factors shaping its future.

1. The Birth and Growth of the US Textile Market

The textile industry in the United States dates back to the late 18th century when the first American textile mill was established in the early 1790s. By the 19th century, the market expanded rapidly, largely due to the sector's industrialisation and the rise of cotton production in the Southern states. By the early 20th century, the US became the world's largest producer of textiles, with a strong foothold in both the production of raw materials (especially cotton) and finished goods.

The American textile industry flourished throughout the 20th century, but the onset of globalisation in the 1980s began a gradual shift towards offshore manufacturing, particularly in regions with lower labour costs. As of the 2020s, while the US remains an important player in the textile industry, its focus has shifted from manufacturing to research, design, and technology integration.

2. Key Players and Market Structure

The US textile market today is composed of several key players spanning different stages of the production process. Some of the largest companies in the industry include:

  • Hanesbrands Inc.: One of the largest textile manufacturers in the US, Hanesbrands is a leader in the production of apparel, including underwear, socks, and activewear. The company generates over $7 billion in revenue annually and operates a vast network of factories both domestically and abroad.
  • Gildan Activewear: This Canadian company has a significant presence in the US textile market, particularly in the production of basic apparel like t-shirts and activewear. Gildan has become a major player by investing in vertical integration, controlling both raw material production (e.g., cotton) and finished goods manufacturing.
  • Puma North America: While originally a European brand, Puma's significant presence in the US market highlights the ongoing demand for sportswear and active lifestyle apparel.
  • Nike, Inc.: As the largest global player in the sportswear segment, Nike has significant manufacturing and retail operations in the US. The company has also been a leader in integrating advanced textiles, such as moisture-wicking fabrics and sustainable materials, into its product offerings.

The US textile market structure combines large multinational companies with smaller, niche producers that focus on high-quality, innovative products. The domestic market has increasingly shifted towards value-added textiles, including functional fabrics for performance wear and eco-friendly materials for sustainable fashion.

3. Economic Contribution to US GDP and Trends Over the Last 20 Years

The US textile industry contributes significantly to the national economy, but its share of the overall GDP has declined in recent decades. According to the United States Bureau of Economic Analysis (BEA), the textile and apparel industry accounted for about 0.8% of total US GDP in 2022, a decline from 1.2% in 2002. This reflects broader trends in manufacturing, where a shift towards a service-based economy has led to deindustrialisation in many sectors, including textiles.

Despite this decline in its direct contribution to GDP, the textile industry remains important for regional economies, particularly in southern states like North Carolina, South Carolina, and Georgia, where textile manufacturing continues to play a crucial role in employment and economic output. In addition, the industry is expected to experience moderate growth in the coming years due to the rise of sustainable and technical textiles, with some estimates suggesting a growth rate of 3-4% annually from 2023 to 2030.

4. Key Trading Partners and Their Role in the US Textile Industry

The US textile industry is heavily dependent on imports for raw materials and finished goods. The following are some of the key trade relationships:

  • China: Historically, China has been the largest supplier of textiles to the US. In 2021, China accounted for approximately 40% of US textile imports. However, rising labour costs and tariffs resulting from the US-China trade war have challenged China’s dominance. Many US companies are now sourcing textiles from other countries, including Vietnam and Bangladesh.
  • Mexico: Mexico plays a significant role in the US textile supply chain, especially with the US-Mexico-Canada Agreement (USMCA), which replaced NAFTA. The agreement encourages greater regional production, particularly in the context of the cut-and-make (CMT) business model, where the fabric is sourced from the US, cut and sewn in Mexico, and then exported back to the US.
  • Vietnam and Bangladesh: Both countries have seen rapid growth in textile exports to the US in recent years. Vietnam, in particular, has become a major source of apparel and functional textiles, benefiting from its relatively low labour costs and trade agreements such as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).
  • India: India is another key supplier of raw materials, especially cotton, and is increasing its presence in the production of finished textile goods.

The US also exports a significant amount of textiles, particularly in the form of technical fabrics for industries such as healthcare, defence, and sports. Countries like Canada, Mexico, and various European Union nations are major destinations for these exports.

5. The US Textile Industry’s Share of the Global Market

The US textile industry remains an important player in the global market, but its relative share has diminished in recent years. According to UN Comtrade data, in 2000, the US accounted for around 17% of global textile production. By 2020, this figure had fallen to about 7%, reflecting the shift of production to lower-cost regions in Asia.

Several factors have contributed to this decline:

  • Offshoring of Production: As previously mentioned, the US textile industry saw a significant offshoring of manufacturing to countries with lower labour costs, especially in Asia. This trend was amplified by trade liberalisation and the removal of quotas under the Agreement on Textiles and Clothing (ATC) in 2005.
  • Automation and Technological Advancements: The rise of automation and advanced manufacturing technologies has helped maintain the US’s position in higher-end market segments, such as technical textiles and smart fabrics. However, these sectors make up a smaller portion of the overall textile industry.
  • Sustainability and Ethical Consumption: In recent years, the demand for sustainable and ethically produced textiles has led some US companies to bring production back onshore. This trend has been most visible in the production of eco-friendly fabrics, where the US market is pushing for greater transparency and compliance with environmental standards.

6. Political and Geopolitical Effects on the US Textile Market

The political landscape, both domestically and internationally, has a significant impact on the US textile market. Key geopolitical and policy factors include:

  • Trade Wars and Tariffs: The trade war between the US and China, initiated in 2018, had a notable effect on the textile sector. Tariffs on Chinese textiles pushed many US companies to seek alternative sources, particularly in Southeast Asia and Latin America. While the Biden administration has eased some tensions, trade policies remain fluid and continue to shape the industry.
  • Free Trade Agreements (FTAs): The US has several FTAs that significantly impact its textile trade. The USMCA, for example, offers incentives for companies to source textiles and apparel from within North America. The CPTPP also opens up markets in the Asia-Pacific region for US textile exports, particularly for technical and performance fabrics.
  • Labour Laws and Environmental Regulations: Domestically, increasing focus on sustainability, labour rights, and environmental issues has led to higher compliance costs. The Biden administration’s push for stronger environmental protections could increase the demand for more sustainable manufacturing practices within the US textile industry.

Conclusion: The Future of the US Textile Market

The US textile market is currently in a state of flux, with challenges and opportunities emerging from various global and domestic trends. While the US has seen a decline in its share of global textile production, it continues to be an important player, particularly in areas such as technical textiles, sustainability, and innovation. As the market continues to evolve, companies will need to navigate the challenges posed by changing trade dynamics, technological advancements, and consumer demand for more sustainable products. With a focus on high-quality and value-added products, the US textile industry can remain competitive in an increasingly globalised market.