US bills $14 bn incentive package to promote Circular Textiles
A recently introduced bill, the Americas Trade and Investment Act (Americas Act), prioritizes circularity within the textile sector, aiming to create a more sustainable and domestically robust industry.
The Americas Act, introduced by Senators Bill Cassidy and Michael Bennet, offers a compelling $14 billion package to incentivize various aspects of circular fashion practices across apparel, footwear, and home textiles.
This includes:
- Boosting Domestic Innovation: Financial support targets American businesses engaged in circular endeavors, fostering a thriving domestic circular economy.
- Reshoring and Nearshoring Production: Incentives encourage companies to bring production back to the US or closer to home, shortening supply chains and reducing environmental impact.
- Sustainable Practices Take Center Stage: The bill emphasizes responsible manufacturing processes, promoting environmental and ethical considerations throughout the textile lifecycle.
- Investment in Infrastructure: Measures are included to improve infrastructure for textile reuse and recycling, creating a more efficient circular system.
“Essentially we have the opportunity for the US to reposition itself as a global leader through localised circular textile manufacturing.”
Senators Cassidy and Bennet on the bill
“No region has greater ties to the United States than the Western Hemisphere. Yet in recent years we have failed to offer the region a compelling economic alternative to China’s growing influence. This bill changes that. It creates an opportunity for the United States to renew our partnerships across Latin America and the Caribbean, strengthen the rule of law, deepen economic prosperity, and embrace our values in a shared struggle for democracy.”
US Senator Michael Bennet (D-Colo.)
“We need to relevel the playing field between freedom-loving democracies and those who exploit the rules like China. We do that by refocusing on the Western Hemisphere to improve trade, bring manufacturing back to our shores, and end China’s growing influence. Our Americas Act will make economies across the hemisphere more resilient, governments more stable, and our hemisphere more prosperous.”
– US Senator Bill Cassidy (R-La.)
Consumer Power: Driving Change Through Choice
The success of this Act extends beyond legislation. A shift in consumer behavior is essential. Consumers have the power to influence the industry by supporting brands committed to circularity and ethical production practices.
With the bold textile reuse and recycling incentive provisions in the Americas Act, organisations in our industry will be able to reinvest in jobs in the US and compete globally, while incubating innovation and R&D (research and development) and fostering an environment to cultivate private capital.
– Rachel Kibbe, CEO of Circular Services Group and American Circular Textile Group
Financial Muscle for a Circular Future
The Americas Act outlines a comprehensive financial package to support the transition to circularity:
- Tax Breaks for Circular Businesses: A 15% net income tax exclusion is offered to businesses engaged in resale, repair, rental, fiber recycling, sorting, and reuse activities.
- Loans and Grants for Innovation: $10 billion in preferential loans and $3 billion in grants are allocated for textile reuse and recycling, manufacturing support programs, machinery for processing and transportation, and components.
- Investing in Research & Development: A dedicated $1 billion is earmarked for research and development related to textile use and recycling technologies.
- Public Education: $100 million is set aside for a public education program to raise awareness about circular fashion practices.
Building a Sustainable Future: The Importance of Infrastructure
The recent bankruptcy of textile-to-textile recycling company Renewcell highlights the challenges faced by startups in this evolving industry. Experts argue that a robust infrastructure supporting circular businesses is critical for long-term success.
“With its reshoring and nearshoring loans, tax benefits, and other targeted grant assistance for workers at home and in our Western Hemisphere partner countries, the Americas Act will bring jobs and investment back to our Hemisphere and stem the root causes of migration by putting more money into the pockets of working families. Importantly, by creating grant programmes for both textiles and medical devices and equipment, this bill directly bolsters two of the largest and most important export industries for the US’s current Western Hemisphere trade partners, including the Dominican Republic. All in all, the Americas Act represents the most transformative piece of legislation to benefit the Western Hemisphere in two decades.”
US Senator Adriano Espaillat (D-N.Y.)
Investing in the Future: The Power of Collaboration
Kibbe emphasizes the importance of building better infrastructure and providing access to low-cost capital for circular textile businesses. The Americas Act seeks to address these challenges by offering financial support with reduced interest rates and grants, paving the way for cost-effective circular textile systems.
A Defining Moment for American Fashion
The Americas Act represents a significant turning point for the US textile industry. The bill aims to create a more sustainable and domestically thriving industry. However, its success hinges on a collaborative effort involving legislators, businesses, and consumers working together to usher in a new era of American fashion.
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