-By Hank Reichle, Staplcotn President & CEO

A LITTLE OVER A YEAR AGO, our industry started to take an even harder look at ways to improve demand for U.S. cotton. A task force, led by the National Cotton Council, identified inherent advantages and opportunities to leverage in addition to challenges that must be addressed to better compete and succeed in the global textile supply chain. While there are numerous ongoing industry initiatives that stemmed from this task force, I will mention two and focus more on the one that Staplcotn believes is the most critical to restoring more reasonable U.S. cotton economics.

There are several notable proverbial “gorillas in the room” when it comes to U.S. cotton’s competitiveness issues. But specifically, there are a couple of twin 800-pound gorillas named Brazil and Polyester that must be addressed before our U.S. cotton industry can find better days.

Polyester, the majority of which comes from an ever-expanding industry in China, is no new challenge. However, there is a new development in this space. The world has recently begun to learn that plastic is not only a visual pollutant like what we see on the side of the road, but it sheds tiny microplastics which pose significant environmental and human health threats. Two-thirds (67 percent) of all fibers used in textiles worldwide are synthetic, with polyester alone accounting for 57 percent of global fiber production. Polyester, along with other synthetics like nylon and acrylic, is derived from fossil fuels, making it a form of plastic that we wear every day.

As brands and retailers and their customers become more aware of the risks associated with plastics and as this research expands, undoubtedly interest will intensify in safer, practical, and, of course, economical replacement ingredients for their products. In the case of apparel, home textiles, and non-wovens, cotton, a natural fiber, will get a fresh look. It is the job of the global cotton industry to make the case to brands and retailers and their customers that cotton is the safe and effective choice when it comes to reducing their reliance on plastic fibers and polyester in their products. Staplcotn applauds the global cotton industry’s collective efforts in joining and supporting the “Make the Label Count” campaign, the international coalition of organizations representing a wide range of natural fiber producers and environmental groups, and the National Cotton Council’s “Plant Not Plastics” campaign. These awareness campaigns, coupled with U.S. cotton’s solid reputation and impressive capabilities through sustainability and traceability programs, no doubt offer a compelling alternative to polyester.

While growing global demand for all cotton is clearly important, the U.S. must carve out a piece of the global market in which it enjoys a preference. The economies of scale, appetite, and wherewithal of Brazil make the carve out essential if U.S. cotton is going to retain its global share of cotton consumption. The Buying American Cotton Act (BACA), introduced in May 2025 by Mississippi Senator Cindy Hyde-Smith, is the legislation that will accomplish such a carve out. The U.S. has the largest retail apparel market in the world, but less than one half of the fiber consumed in the U.S. retail market is cotton, and less than 10% of it is U.S. cotton. Through tax credits for brands and retailers, BACA incentivizes the use of not only U.S. cotton but also U.S. made yarns and fabrics. Under the proposed legislation, entities selling finished products and claiming the transferable tax credits must be able to demonstrate proof of the use of U.S. cotton through any trustworthy supply chain tracing system such as the U.S. Cotton Trust Protocol’s Textile-Genesis offering. The tax credit that may be taken depends on the price of cotton as established by the U.S. Treasury (proposed as a three-rolling crop year average), the weight and type of U.S. cotton contained in the finished good (raw cotton, yarn, or fabric), and where the finished product was manufactured. The applicable cotton price established by the U.S. Treasury in the year of import is multiplied by a factor of 1 for the weight of the U.S. raw cotton, or 1.6 for the weight of the U.S. cotton yarn, or 6.5 for the weight of the U.S. cotton fabric. The final tax credit calculated for the product is determined by multiplying by a location factor of 24% if the good was made in the United States or a country with which the U.S. has a free-trade agreement; otherwise, the location factor is 18%. For example, a product made in Pakistan imported for sale in the U.S. retail market that contains a pound of U.S. cotton would be accompanied by a transferable tax credit of $.15 when the applicable cotton price is $.85/lb, ($.85 x 1 lb x .18 = .15). This credit will go a long, long way to increasing U.S. cotton’s competitiveness at U.S. retail relative to both foreign grown cotton and other fibers, including polyester.

Given that U.S. retail annual bale equivalent offtake is at least 20 million bales, this will mean U.S. cotton’s recent production levels of 14 million bales will not be enough and the futures market will have to rise to incentivize U.S. production to return to the 17-20 million bales that the U.S. can produce. Brands benefit not only because of the tax incentive, but they also get trusted U.S. cotton and can more easily make the switch away from cheaper polyester. Consumers benefit because they know more about the cotton they wear, sleep on, or groom with and that it is from a responsibly sourced origin that supports rural communities and has less microplastic issues with increased cotton content. Even the U.S. government benefits. Though tax collections will decrease, the rise in price for U.S. cotton and the competitive edge gained by U.S. cotton manufacturers will have a multiplier effect and support price outlays afforded under the Farm Bill will offset some, if not all, of the loss in tax revenues. The Trump Administration, their allies, and even non-Trump supporters will win on many fronts including rural community preservation, job creation, environmental, and “Made in America”. Most of all, farmers who grow cotton will win because the price received for selling cotton will be more in line with what it costs to grow it. Our industry and Staplcotn have no greater cause right now than promoting BACA to Congress and the Administration. Staplcotn will leverage our members’ voices to encourage D.C. to pass this crucial legislation to keep the U.S. cotton industry as one of our nation’s great resources and rural economic engines.