The Chinese, understandably, are miffed. They've already been accused around the globe of manipulating their currency to gain an unfair trade advantage. Critics say that by devaluing the yuan, the Chinese make their goods and services more affordable for export.
No sector of the U.S. economy understands the impact of Chinese imports like the textile industry. With jobs at stake and American-made products rapidly losing market share, textile officials have convinced the Bush administration that tough action is necessary.
The Commerce Department action was taken after U.S. manufacturers implored the Bush administration to stem the flood of Chinese imports. They claim that in 2002 alone, imports of certain Chinese textiles increased by more than 2,000 percent with the lifting of U.S. quotas. They also allege that the U.S. has lost one-third of its textile industry jobs since January 1, 2001. That's some 316,000 workers.
U.S. retailers and importers opposed the safeguards, calling the action "pure politics." They charge the White House moved forward with the quotas simply to buy votes from lawmakers in textile states on upcoming free trade agreements.
U.S. farm interests also are concerned, fearing the Chinese will retaliate against American farm goods. Indeed, Chinese wheat and soybean buyers cancelled planned visits to the States. Chinese cotton buyers also seemed prepared to pull back.
But U.S. textile officials denied the quotas will damage trade relations. They predicted some initial Asian "saber-rattling," but also said the Chinese are more interested in protecting their $100 billion trade surplus with the U.S. than in launching a trade war.
Auggie Tantillo, American Manufacturing Trade Action Coalition: "We are not cutting back China. We're not preventing their ability to export to the United States. We're simply saying that this system will allow for much more reasonable growth in these three particular categories..."
Officials also noted the safeguards were agreed to by the Chinese as part of their effort to win membership in the World Trade Organization.
Robert DuPree, American Textile Manufacturers Institute: "This was their commitment and to be huffing and puffing now about, 'Well, we didn't mean it when we signed that' is a little disingenuous."
Textile industry officials see the quotas as only a first step and vow to pressure the White House to cover other categories. The industry is especially worried about the lucrative knit trouser and knit shirt market. Import quotas on those items are scheduled to come off in 2005.