Fashion
USDA releases payments under 2026 Pima Cotton and Wool Trust Funds
The move comes as the US textile industry continues to face structural challenges stemming from trade agreements and tariff imbalances over the past two decades. These factors have contributed to a broader decline in domestic manufacturing, including textiles, the USDA said in a press release.
USDA has announced 2026 payments under the Pima Cotton and Wool Trust Funds to support domestic textile manufacturers.
The schemes aim to offset tariff inversion impacts and boost competitiveness.
Backed by the 2014 Farm Bill, the programmes provide financial relief to cotton and wool producers, encouraging domestic production and industry revival.
A key concern highlighted is tariff inversion, where duties on imported fabrics exceed those on finished apparel, incentivising offshore production. The trust fund payments are designed to offset this imbalance by providing financial support equivalent to the benefits manufacturers would receive under more favourable tariff conditions.
“US textile companies produce world-renowned quality products and employ a highly skilled workforce,” said Stephen A Vaden, deputy secretary of Agriculture. “These payments strengthen our domestic manufacturers and ensure a fair playing field for American textiles, helping rebuild this important industry. More American companies should take advantage of this program and manufacture more of the clothing we all wear here in the USA.”
The Pima Cotton Trust, established under section 12314 of the 2014 Farm Bill, is funded through 2031 with $16 million annually from the Commodity Credit Corporation (CCC). It aims to mitigate economic injury caused by higher tariffs on cotton fabric compared with certain cotton apparel imports.
Under the programme, 25 per cent of funds are allocated to associations promoting Pima cotton, another 25 per cent to US yarn spinners producing ring-spun cotton yarn, and the remaining 50 per cent to domestic manufacturers that cut and sew cotton shirts using imported fabric.
Similarly, the Wool Trust, created under Section 12315 of the 2014 Farm Bill, is funded through 2031 with up to $30 million annually. It supports manufacturers affected by tariff disparities in wool products.
The Wool Trust provides payments to worsted wool fabric producers, enables monetisation of tariff-rate quotas, offers duty compensation for wool inputs, and refunds duties on selected wool imports.
Applications for the Pima Cotton Trust close on March 15 each year, while the deadline for the Wool Trust is March 1. Payments are mandated to be made by April 15.
Fibre2Fashion News Desk (SG)