The U.S. Department of Agriculture (USDA) on Tuesday announced 2026 payments under two long-running support programs for domestic textile and apparel manufacturers, renewing federal aid aimed at easing the cost pressures created by a tariff structure that industry groups say has weakened American production for years.
The payments will be made through the 2026 Pima Agriculture Cotton Trust Fund and the 2026 Agriculture Wool Apparel Manufacturers Trust Fund, both of which were established to offset the disadvantage faced by U.S. companies when duties on imported fabric are higher than duties on some finished garments entering the country.
USDA said the programs are designed to help domestic manufacturers compete more fairly by providing support equal to the benefits they would have received if earlier duty reductions had remained in effect.
The agency said the payments can help eligible firms maintain payrolls, increase production and regain lost market share in a sector that has seen sustained pressure from trade shifts, offshoring and cheaper imports.
“U.S. textile companies produce world-renowned quality products and employ a highly skilled workforce,” Deputy Secretary of Agriculture Stephen A. Vaden said in the USDA announcement. He said the trust payments are intended to strengthen domestic manufacturing and help restore a fairer competitive environment for American textile producers.
The move highlights Washington’s continuing effort to preserve parts of the U.S. textile supply chain even as broader manufacturing capacity has declined over the past two decades.
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Industry advocates have long argued that tariff inversion has created a structural disadvantage for domestic producers by making it cheaper in some cases to move production offshore and then ship finished products back into the United States than to import fabric and manufacture clothing domestically.
The Pima trust was created under Section 12314 of the 2014 Farm Bill and is funded through 2031 with $16 million per year from Commodity Credit Corporation funds. Its purpose is to reduce the economic injury to domestic cotton manufacturers caused by tariffs on cotton fabric that are higher than tariffs on certain apparel made from that fabric.
Under the law, 25% of the annual Pima trust funds go to one or more nationally recognized associations that promote the use of Pima cotton in textile and apparel goods.
Another 25% goes to yarn spinners of Pima cotton that produce ring-spun cotton yarns in the United States. The remaining 50% goes to manufacturers that cut and sew cotton shirts in the United States and certify that they used imported cotton fabric during the preceding year.
The wool trust, created under Section 12315 of the 2014 Farm Bill, is funded through 2031 with up to $30 million a year, also through the Commodity Credit Corporation. USDA said the goal of that program is similar: to reduce the injury to domestic manufacturers resulting from tariffs on certain wool fabrics that are higher than tariffs on certain apparel made from those fabrics.
The wool program provides four types of support. These include payments to manufacturers of certain worsted wool fabrics, monetization of the wool tariff-rate quota, duty compensation payments for wool yarn, wool fiber and wool top, and refunds of duties paid on certain wool imports. Together, the measures are meant to cushion domestic manufacturers from the impact of tariff structures that favor imported finished apparel over U.S.-based production.
The annual payment programs remain one of the few federal mechanisms specifically targeted at U.S. makers of cotton and wool apparel inputs. While the payments do not change the underlying tariff system, they provide direct financial relief to companies operating in segments of the textile market that have struggled to remain competitive against lower-cost overseas manufacturing hubs.
The timing is notable for a U.S. textile industry that continues to operate in a difficult global environment. Cotton producers and apparel manufacturers have been dealing with shifting trade rules, volatile input costs and changing sourcing patterns, while man-made fibers continue to take share from natural fibers in many parts of the global market. For domestic firms, the added burden of tariff inversion has reinforced the economic case for moving production abroad, a trend these trust funds were designed to counter.
USDA’s latest announcement also serves as a reminder that the U.S. government still sees strategic value in maintaining domestic textile capacity, particularly in areas tied to higher-value cotton and wool manufacturing. Although the sector is far smaller than it once was, it remains important in specialized production, regional employment and parts of the broader U.S. industrial base.
Applications for the trust programs follow a fixed annual cycle set by law. USDA said the deadline for Pima trust applications each year is March 15, while the deadline for wool trust applications is March 1. Payments must be issued by April 15.
For eligible companies, the 2026 payments offer a modest but meaningful financial buffer at a time when domestic textile makers continue to navigate an uneven playing field. For policymakers, the programs remain a targeted tool to support American manufacturing without rewriting the tariff system itself.
