The textile trade war continued as the US in mid-May reimposed quotas on three types of Chinese apparel imports after Commerce Department data showed surging shipments since the global textile quota was lifted in January this year.
China denies its exports of cotton knit shirts, cotton trousers and cotton and manmade fiber underwear, the three categories that the US seeks to limit, have disrupted the US market. Chinese Premier Wen Jiabao criticized the decision, saying it was "not beneficial" to trade relations. After its WTO accession, China agreed to allow member countries to curb its textile exports to 7.5% above the previous year if a sudden jump disrupted markets. The US cited data showing its Chinese trouser imports up 1,500% in the first quarter from a year ago, knit shirts up 1,250% and underwear imports tripling.
The EU is also turning up the heat, although its Trade Commissioner Peter Mandelson said China still had time to avoid EU's emergency procedure to curb Chinese textile exports if it provides details of plans to regulate the flow. The EU began an investigation on April 29 into the spike in Chinese apparel imports after its data showed a 400% increase in pullovers and men's trousers in the first quarter. But France, Italy, Spain, Portugal, Greece, Lithuania and Poland have urged the European Commission to sidestep that procedure, which could last up to 60 days, and immediately confront Beijing, which would then have 15 days to curb its exports or face sanctions.
At a May 12 meeting with visiting EU foreign ministers, Premier Wen Jiabao said China would implement macro measures to restructure the sector.