NEW YORK — Innerwear firms are facing a major dilemma as 2004 looms.

Makers of intimate apparel, a $12.2 billion business at retail, are being rocked by what a majority see as the single biggest challenge of the past decade: the Bush Administration’s bombshell last month to cap imports of bras, robes, dressing gowns and knit fabrics from China. It comes at a time when smaller, independent companies have begun to commit a substantial portion of production to China, which will be regarded as new business with a quota limit increase of 7.5 percent over the previous year.

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