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U.S. Imposing New Limits on Chinese Textile Imports

posted on May 20, 2005

Hello, I'm Mark Pearson.

Government numbers out this week indicate April was NOT a stellar month for the U.S. economy.

*More expensive energy and cars caused wholesale prices to jump a hefty six-tenths of a percent last month. *Those same factors drove consumer prices higher, as well. *Even so, the "core" inflation rate, which excludes volatile food and energy costs, was relatively flat in April.

On the trade front, meanwhile, tensions between the U.S. and China reached new heights this week.

China accounts for about one-fourth of the bloated U.S. trade deficit. But U.S. farm exports to China last year jumped to a record $5.5 billion. So threats of quotas and tariffs are taken seriously in farm country.

Against that backdrop, the Bush administration yielded to pressure from the cotton and textile industries to crack down on imports of Chinese apparel

U.S. Imposing New Limits on Chinese Textile Imports The Bush administration says it will impose new limits on clothing imports from China. The action is in response to complaints by domestic producers that a surge in imports of Chinese apparel was threatening thousands of U.S. jobs. The National Cotton Council declared its approval of the quotas, saying the action will help the U.S. textile industry adjust to the current competitive environment.


The re-imposed quotas will restrict a number of items that China can ship to the U.S. The items include cotton trousers, cotton knit shirts and underwear. Shipments in those three categories will be allowed to increase by just 7.5 percent this year.


Not everyone is happy with the re-imposition of quotas, including U.S. retailers. They argue that the move will drive up prices for American consumers. U.S. retailers also point out that clothing and textile imports from China actually declined in March after the surges in January and February.

Trade officials in Europe also are considering limiting Chinese imports, though the 25-member European Union is divided over the issue. Textile producing nations like Spain, France, Italy and Greece say products from China will damage their industries. But, retail nations, such as the United Kingdom and Sweden, enjoy having unregulated access to cheap Chinese goods.


For its part, China is angry with the textile limits. It's responding to U.S. and EU pressure by accusing both of failing to follow through with their own market-opening pledges. According to DTN, Chinese officials claim Europe and the United States were slow in carrying out promises to open markets before a worldwide quota system ended January 1. They say the inaction led to the surge of inexpensive Chinese textile imports into Western markets.

Chinese officials allege the quotas are based on inaccurate data and that they violate world trade rules. They urge talks on the issue should continue.

Tags: China European Union news trade