The Bush administration decided Friday that it will impose a quota on sock imports from China — the latest round of an increasingly bitter trade dispute with Beijing.
Trade has become a hot issue on the campaign trail with President Bush, an unrepentant free trader, accusing his Democratic opponent, John Kerry, of being an “economic isolationist.” Kerry has countered that Bush has not done enough to protect American workers from unfair foreign competition.
The U.S. trade deficit with China hit an all-time high for any country of $124 billion last year and is running at an even higher $140 billion rate this year. Seeking to reduce the deficit, the Bush administration has been pushing China to ease its pegged currency system. American manufacturers say the system, which keeps the yuan as much as 40 percent undervalued, gives Chinese products a tremendous competitive advantage.
The interagency Committee for the Implementation of Textile Agreements, chaired by the Commerce Department, ruled that sock imports from China are disrupting the U.S. market and there is a risk of further disruption. The committee will seek talks with China to try to ease or avoid any disruption.
Once consultations are sought, the department said, “a quota will be put in place to limit U.S. imports of socks from China” to an increase between 6 percent and 7.5 percent over current import levels, a far smaller increase than has occurred in recent years.
“The United States will make every effort to reach a mutually satisfactory agreement with the Government of China to ease or avoid the disruption in the U.S. market within 90 days of such a request,” the department said.
If talks fail, the quota will remain in effect for a year, the department said.
Besides socks, U.S. textile and clothing manufacturers asked the administration Oct. 12 to protect them against a surge of Chinese imports next year when worldwide quotas are removed under World Trade Organization rules. The petitions covers cotton and synthetic trousers, wool trousers, cotton and synthetic knit shirts and underwear.
The administration will have to make an initial ruling on the technical merits of the cotton trousers petition Nov. 1, one day before Election Day.
U.S. manufacturers have been concerned they could be ruined by a flood of low-cost socks from China as import quotas expire at the end of the year. So they led an industry call last summer for the administration to help.
Rep. Robert Aderholt, R-Ala., joined the effort by the Hosiery Association and asked the Commerce Department to help shield the sock industry from Chinese imports in a letter signed by Aderholt and 22 other members of Congress from both parties.
In 2002, Aderholt said, 69.6 million pairs of Chinese socks were imported. Last year, that number jumped 370 percent to 265 million pairs. Fort Payne, Ala., is the self-proclaimed Sock Capital of the World, employing 6,200 workers in 95 factories that produce 14 million pairs a week.
Some retailers, large manufacturers and importing companies blasted the sock decision, which followed a move earlier this year to limit the import of nightgowns and brassieres from China.
Laura E. Jones, executive director of the U.S. Association of Importers of Textiles and Apparel, said the decision is “totally political and has nothing to do with reality.”
“Today’s decision only perpetuates the failed protectionist policies that have discouraged the U.S. textile industry from becoming competitive, innovative and responsive to their customers, which in turn has exacerbated job losses in the industry,” she said.