The US on Monday took the first step towards reimposing quotas on some clothing imports from China, as the Commerce Department announced it would launch its own probe into whether China's burgeoning sales were disrupting the US market.
The action makes it almost certain that the US will impose new quotas on cotton trousers, shirts and underwear, just three months after the global quota system for textiles and apparel was abolished. Chinese sales of those goods in the US were worth about $625m last year, but in the first month of this year alone they totalled $160m.
While World Trade Organisation rules allow the US, Europe and other importing nations to re-establish quotas if there is a flood of imports, Monday's action marked the first time Washington had launched such a probe on its own rather than waiting for a formal application from US textile companies.
Carlos Gutierrez, US commerce secretary, said the decision is “the first step in a process to determine whether the US market for these products is being disrupted and whether China is playing a role in that disruption”.
The move comes after sustained pressure from the US textile industry since the elimination of quotas on January 1. The industry has been calling for such “self-initiation” by the government since figures released last month showed a surge of Chinese sales in January.
Their case was reinforced by Friday's release of preliminary US data for the first three months of the year, the first time Washington has published such figures so promptly.
They showed that the volume of cotton shirt sales rose 1,250 per cent from the same period last year, while cotton trouser shipments were up nearly 1,500 per cent and underwear shipments rose by 300 per cent.
US importers of Chinese clothing called the move “an unjustified act”, saying such preliminary data was unreliable, and might indicate only that China was gaining US market share at the expense of other exporters. “There is no reason to believe that imports from China are causing market disruption,” said Laura Jones, executive director of the US Association of Importers of Textiles and Apparel.
The government's decision to launch the case will shorten the time for any investigation, meaning that Washington could decide to reimpose quotas as early as next month, and must come to a final decision within 150 days.
The National Council of Textile Organisations applauded the move yesterday, saying it expected to see quotas back in place in as little as five weeks.
The US and China will also try to reach a negotiated settlement, though the US industry has in the past dismissed Chinese pledges to restrain exports. If a deal cannot be struck, the US will limit China to 7.5 per cent annual growth in such exports.
