updated 5/18/2005 7:31:12 PM ET 2005-05-18T23:31:12

Trade tensions between the U.S. and China escalated Wednesday when the Bush administration said it will set new limits on the amount of clothing that China can ship to America.

It was the second time in five days that Washington announced such quotas, acting on complaints that a surge of Chinese apparel was hurting U.S. companies.

The new batch of Chinese goods facing restrictions are men's and boy's cotton and man-made fiber shirts; man-made fiber trousers; man-made fiber knit shirts and blouses; and combed cotton yarn.

A textile industry representative said the categories of trousers as well as shirts and blouses would affect men's and women's products.

North Carolina Senator Elizabeth Dole, whose state has been beset by thousands of layoffs as textile mills closed, applauded the administration's action.

"This will prevent further damaging surges into the United States — rather than reacting to them once it's too late," said Dole, R-N.C.

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

The government committee, led by the Commerce Department, that made the decision found that those categories of imports threatened to disrupt the U.S. market. Shipments of Chinese textiles and apparel to the U.S. have surged since the end of global quotas Jan. 1.

Just on Friday, the administration 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 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."

The step will mean that shipments of the categories of clothing cited Wednesday will be permitted to increase this year by just 7.5 percent compared with shipments over a 12-month base period.

The U.S. has the power to set the limits on Chinese goods under an agreement that cleared the way for Beijing's membership in the World Trade Organization in 2001.

The American Manufacturing Trade Action Coalition, a textile industry group, praised the move.

"Failure to act would have cost tens of thousands of U.S. jobs," said the group's executive director, Auggie Tantillo.

But Laura Jones, executive director of the United States Association of Importers of Textiles and Apparel, was critical.

"These restrictions on imports from China will do absolutely nothing to help the U.S. textile industry — and the government knows it," said Jones, whose group includes large retailers.

Tim Lyons, a spokesman at J.C. Penney Co., said "It was expected that a safeguard would be imposed at some point. We are adequately prepared."

U.S.-China trade is a politically sensitive issue for the administration. America's trade deficit with China set a record last year, $162 billion. That was the largest imbalance ever with a single country.

Democrats have accused the president of not doing enough to protect American workers from unfair foreign competition.

The administration on Tuesday stepped up pressure on China to overhaul its currency system, which manufactures and other critics also 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 makes Chinese goods cheaper in the United States and American products more expensive in China.

© 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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