Bush Administration Limits China Apparel Imports

The Bush administration said Wednesday it will impose new limits on imports of clothing from China (search). The action follows complaints that a surge of Chinese apparel to the United States was hurting U.S. companies.

The administration will restrict a number of items that China can ship to the United States: men's and boys cotton and man-made fiber shirts, man-made fiber trousers, man-made fiber knit shirts and blouses and combed cotton yarn.

American retailers are concerned that the move will raise the prices of these goods for U.S. consumers.

The government committee, led by the Commerce Department, that decided to set the new quotas found that those categories of imports threatened to disrupt the U.S. market.

In an earlier sign of the trade tensions between the two countries, the administration last week said it was re-imposing quotas on three categories of clothing imports from China — cotton trousers, cotton knit shirts and underwear.

Commerce Secretary Carlos Gutierrez (search) said Wednesday's decision "demonstrates the administration's continued commitment to America's textile manufacturers and their employees."

The United States, he said, "will enforce our trade agreements to ensure that U.S. companies get a fair deal as they compete in the global marketplace."

America's trade deficit with China set a record last year, $162 billion. That was the largest imbalanced ever with a single country.

The administration on Tuesday stepped up pressure on China to overhaul its currency system, which critics blame for the soaring U.S. trade deficit and the loss of American factory jobs.

The Treasury Department threatened to brand China, if it failed to change its currency policy soon, as a manipulator of currency. That designation could lead to economic penalties against Beijing.

Over the past two years, the administration has tried to prod China to stop linking its currency, the yuan, to the U.S. dollar.

American manufacturers say China's system has undervalued the yuan by as much as 40 percent. The weaker yuan (search) makes Chinese goods cheaper in the United States and American products more expensive in China.