Asian textile industry returns to invest in the United States

Citing data, the Taiwan Textile Federation shows that as wages, energy and other costs in Asia rise, more and more Asian textile manufacturers are moving their factories to the southeastern United States, increasing local job opportunities.

Citing information from the Commercial Division of the Taipei Economic and Cultural Office in Los Angeles, the Taiwan Textile Federation said the cost of textile production in the United States has gradually fallen below that of countries such as China, India, Turkey, South Korea and Brazil.

In 2003, spinning 1 kg of yarn in the United States cost 2.86 US dollars, while in mainland China it cost 2.76 US dollars; but in 2010, the cost of textile operations in the United States was 3.45 US dollars, while in mainland China it rose to 4.13 US dollars.

The Taiwan Textile Federation said that Keer Group Co. of Hangzhou, Zhejiang, mainland China, will set up a factory in North Carolina, investing 218 million US dollars, and is expected to create 500 job opportunities. Electricity costs at the new factory are half cheaper than in China, and the local government can also provide financial assistance.

In addition, China's JN Fibers Inc. set up a factory in South Carolina in September 2013, investing 45 million US dollars and creating 318 job opportunities. The South Carolina Department of Commerce said that rising production costs are prompting Asian companies to consider moving their factories to the United States.

The data points out that India's Mumbai-based ShriVallabh Pittie Group announced in October 2013 an investment of 70 million US dollars to build a textile factory in Georgia, providing 250 job opportunities. Company executives said that setting up a factory in the United States not only exempts them from tariffs, but also allows them to use the United States' abundant, cheap energy.

The Taiwan Textile Federation said that tariffs are one of the main reasons the textile industry is returning to the United States. The United States imposes tariffs of 5% to 6% on yarn, 10% to 12% on fabric, and 15% to 20% on clothing. For many years, Asian manufacturers absorbed these costs through low production and transportation costs. Now that the overall environment has changed, they must reassess.