RILA and nine other retail, apparel, and footwear groups, including AAFA, FDRA, NRF, and USFIA, have sent a joint letter to USTR Ambassador Jamieson Greer, Mexico’s Secretary Marcelo Ebrard, and Canadian Minister Dominic LeBlanc, urging all three governments to preserve USMCA’s duty-free treatment and rules of origin as the formal joint review begins.
Rules of origin for non-automotive goods, including apparel and footwear, are explicitly on USTR’s review agenda. Duty-free treatment is not, and nobody has proposed changing it. For importers, rules of origin are the variable to watch during this review.
The US has declined to renew the USMCA outright. Instead, the pact now runs on mandatory annual reviews instead of a single 16-year extension. It remains in force, and duty-free treatment holds for now.
The ask: RILA director Ellen Jackson said the pact “provides the certainty retailers need to plan supply chains, invest in North America, and keep goods moving efficiently for consumers.” The joint letter calls USMCA’s “core structure” essential to avoiding “unnecessary trade disruptions and business uncertainty.”
This is the coalition’s second letter in eight months. The same 10 groups, including RILA, wrote to Greer last November asking for a full 16-year renewal. This time, their stand has softened from renewal to preservation.
The split: Not every industry group wants the same outcome.
Retailers (RILA): Preserve the status quo, including duty-free treatment and today’s rules of origin
Textile makers (NCTO): Use the review to tighten the rules. CEO Kim Glas told Supply Chain Dive it should be used for “closing loopholes that undermine the yarn-forward rule, strengthening customs enforcement”
Manufacturers (Alliance for American Manufacturing): Go further. Scott Paul called the review a chance to “renegotiate the agreement and defend America’s workers”
Yarn-forward is apparel’s version of the auto sector’s regional value content test. It requires garments to be cut and sewn from yarn spun in North America to qualify duty-free. Tightening it would raise the compliance bar just as RILA asks for the status quo.
The re-sourcing exposure: Nike, Ross, Lululemon and Williams-Sonoma have all cut China sourcing over the past few years to blunt tariff exposure. Nike is reallocating footwear production to Indonesia, Mexico and Central America, while Ross has leaned into Vietnam, India and Malaysia.
A tighter yarn-forward rule would hit the volume sourced from Mexico and Central America. It would raise compliance requirements for sourcing strategies that brands adopted specifically to reduce their reliance on China.
What's next: The next US-Mexico bilateral round is scheduled for later this month. It will cover auto rules of origin and metals. Talks with Canada have not started. Negotiations on non-automotive rules of origin, which directly affect the apparel and footwear industry, have not yet been scheduled.
