As US and EU trade organizations begin imposing tariffs on its goods, China chooses not to impose duties on its massive textile industry.
The ongoing battle over Chinese textiles continued as China complained of unfair trade practices by both the United States and the European Union. China claims the two have improperly imposed quotas on imports.
The US, whose Commerce Secretary, Carlos Gutierrez, visits China later this week, has a huge trade deficit with China, and has been pressing the Chinese government to allow its currency to float on world markets. China’s practice with the yuan has been to keep it pegged to a value of 8.3 to the dollar.
When the global quota system ended on January 1, China imposed tariffs on the textile industry. But the measures were not enough to slow a 29 percent growth in textile exports in the first quarter. That growth has hurt textile concerns in both the US and Europe.
China removed most of its tariffs on May 20th. Previously announced increases on other tariffs would be lifted on June 1. The Chinese government had stated previously it would cancel tariffs if trade partners imposed quotas.
The US had begun limiting imports of several categories of clothing and yarn, affecting about $914 million worth of goods. China’s tariff cancellation came in the wake of that move.
US Senators have been pressed by textile manufacturers to take a more protectionist stance against China, and the Senate has been lobbying the White House on the issue. Senators were not pleased by a recent Treasury report that China was not manipulating its currency.
Should the Commerce Secretary’s visit prove ineffective at resolving the situation, China may take its complaint to the World Trade Organization. The EU has likewise called for formal consultations with China, a step that could avert more quota action there.
David Utter is a staff writer for Murdok covering technology and business. Email him here.
