How Closing the De Minimis Loophole Is Reshaping the U.S. Textile Industry

The U.S. textile industry is undergoing significant structural stress. According to multiple recent reports, numerous mills have closed—spurring layoffs—due in large part to imports entering under the de minimis threshold, which allowed small shipments to bypass tariffs, duties, and customs inspections. This provision, by enabling duty-free imports of textiles/apparel under $800, especially via e-commerce platforms from China, has distorted market dynamics and eroded demand for domestic fabric, yarn, and mill products.

Responding to mounting pressure, policy change has become concrete. President Trump’s executive orders have first eliminated de minimis protections for China and then globally for all commercial shipments as of August 29, 2025. Congress has cemented this repeal into law, with full implementation required by July 1, 2027. These reforms aim to force parity in how imports and domestic textiles are treated under U.S. trade policy, restoring customs oversight, duties, and origin disclosure for previously exempt shipments.

Data is striking: the National Council of Textile Organizations reports employment in the textile supply chain at 471,000 in 2024, shipment value increases (textiles/apparel worth $63.9 billion; exports $28 billion), yet mill usage of cotton dropped from 2.05 million bales in 2022/23 to about 1.75 million forecast in 2023/24. [0 primary; from original); corroborated in other sources? Need to verify. However, CBP data places total de minimis shipments in 2023 at about 1 billion, rising to 1.36 billion by end of FY 2024, with roughly half of those being textiles/apparel.

Strategically, closing the loophole represents both an opportunity and a risk. Domestic mill owners may regain market share but will need to invest in capacity, quality, and efficiency to meet tariff-protected competition. Consumers may face higher costs, especially for inexpensive apparel that formerly entered under de minimis; online retailers and freight intermediaries must adapt to compliance requirements. Enforcement capacity—customs, inspection, origin verification—must scale rapidly. Finally, trade retaliation, supply chain disruptions, or substitution effects may emerge, especially in countries or firms reliant on low-value shipments.

“Demand destruction” is a theme: mills once operating near full capacity are now at 50-60%, with several shut down plants. Parkdale Mills, for example, was cited saying it operated at ~60% capacity and shuttered four factories in 2023, laying off ~1,000 workers, attributing part of its struggle directly to de minimis imports. [0 primary; verified by external sources? Primary article). This indicates that the impact is already measurable in capacity utilization and cotton demand.

Open questions include: How will enforcement roll-out proceed in practice? Will costs be passed to consumers or absorbed by intermediaries? What is the risk of trade diversion or fraud shifting to informal or gift channels? How will this impact smaller businesses and jobs in downstream sectors? Monitoring economic data—mill usage, cotton demand, capacity utilization, trade flows—will be crucial in the next 12-24 months.