WASHINGTON — Unrestrained in global trade for the first time in 24 years, China flooded the U.S. market with apparel and textiles in January, prompting U.S. textile and fiber producers to ratchet up the pressure on the Bush administration to stem the rising tide.
The debate over whether China’s rising economic dominance should be curtailed intensified with the release Friday of the U.S. Department of Commerce’s January trade data. As worldwide imports of textiles and apparel entering the U.S. in January rose 6.4 percent to 3.8 billion square meters equivalent, China’s shipments increased 19.83 percent to 1.14 billion SME.
China’s share of U.S. textile and apparel imports grew to 29.4 percent on a volume basis compared with January 2004. China’s share of U.S. textile imports grew to 35 percent, and its share of apparel imports rose to 21.7 percent.
A coalition of U.S. textile and fiber producers and the UNITE HERE union — poised to file China safeguard petitions based on actual market disruption using the current U.S. import figures — said the data validated their concerns that China will monopolize global apparel and textile production and decimate the U.S. industry.
Importer and retailer groups, on the other hand, accused the domestic industry of exaggerating the numbers and said the statistics showed that several Central American countries, as well as others, competed toe-to-toe with China in January. They said the trade report discounted the argument that China will steamroll every foreign apparel and textile supplier, and did not support the call for the government to self-initiate action to restrain China’s trade.
“The numbers released by the government today confirm our predictions and fears in regard to China’s ability to export massive amounts of goods to the U.S. in the apparel and textile sector, and to begin to monopolize the U.S. market,” Auggie Tantillo, executive director of the American Manufacturing Trade Action Coalition, said at a news conference. “For the better part of the year, we have heard from importing and retailing interests that our predictions were exaggerated. We actually heard from the Chinese themselves and they said not to worry, that they would self-moderate their activity. They were either inaccurate or misinformed, and we were correct.”Cass Johnson, president of the National Council of Textile Organizations, noted that seven textile mills have already closed this year, while 12,000 apparel and textile jobs were lost in January.
“This is not conjecture, this is not a trend, this is reality,” Johnson said. “That is why the U.S. government needs to act fast.”
The coalition filed 12 safeguard petitions based on the threat of market disruption in October targeting $1.9 billion in Chinese imports for further quota restraints. At the time, the groups sought to preempt what they asserted would be surges in imports in the U.S. once quotas were lifted on Jan. 1. However, those petitions and the government’s review process have been caught up in a legal battle and suspended by a preliminary injunction for the past two months.
Tantillo said if the coalition files market disruption cases, the safeguard review process could take four months and China would have a chance to build up its trade levels before quotas were imposed. However, if the government self-initiates, it might cut out two months from the review process, Tantillo said.
“We’re preparing to place as much pressure on the government as possible to self-initiate,” he said. “Obviously, if they don’t, we’ll take matters into our own hands.”
Jim Leonard, deputy assistant secretary of textiles and apparel at Commerce, said in a statement, “There is a significant increase in apparel imports from China. We are concerned about the impact of this increase on our trade and our industry.”
Leonard noted the U.S. will raise the issue as part of the dialogue with the Chinese to “reinforce U.S. concerns over our textile trade disparity and to seek solutions.”
A Commerce spokeswoman said officials could not comment on the textile industry’s calls for self-initiation. “If there is evidence of market disruption, we will consider the issue on its merits and make a decision on any action based on the facts,” the spokeswoman said.
The increases in several import categories from China targeted by the coalition in the threat-based cases were startling. Imports of women’s and girls cotton trousers surged by more than 1,000 percent over a year ago, while imports of men’s and boys’ cotton trousers leapt 989.6 percent. Imports of women’s and girls’ cotton shirts rose 522.6 percent, shipments of synthetic filament fabric rose 278.6 percent, imports of man-made fiber underwear increased 210.3 percent and women’s and girls’ man-made fiber trousers gained 89 percent.Importer and retailer groups claimed China’s increased trade was only part of the picture.
“I don’t see anything that is out of line with what we’ve been expecting for a long time,” said Erik Autor, general counsel and vice president of international trade at the National Retail Federation. “Imports from China are up as we expected, but not at levels that are out of line with the end of quotas and the shift of business from high-cost producers like Hong Kong to China.”
Autor contended that one-third of China’s increase in apparel imports came from a shift in business from Hong Kong and Macau, which posted declines in exports to the U.S. of 35 percent and 25 percent, respectively. Hong Kong and Macau participate in an outward processing arrangement that allowed importers to use co-production in either country with China.
Julia Hughes, vice president of international trade at the U.S. Association of Importers of Textiles & Apparel, which has fought the government’s right to review the threat-based petitions in court, said many countries reported sharp increases in apparel exports to the U.S., proving they can compete with China in a quota-free environment. Apparel imports rose 27.9 percent from Honduras, 20.7 percent from El Salvador, 13.3 percent from Bangladesh, 20.3 percent from Cambodia and 28 percent from Vietnam.
“The key element is we are seeing increases from China, but we are also seeing a very strong increase from Western Hemisphere countries that rely on U.S. yarn and fabric,’’ Hughes said. “It’s pretty clear we are seeing a shift going on in the sourcing pattern, but the story isn’t that all of the business is going to China.”
Alberta Ferretti's "Rainbow Week" sweaters are back. The designer closed her #MFW show with a few day-of-the-week sweaters, which first debuted on the catwalk last January as part of the pre-fall 2017 collection. #wwdfashion (📷: @delphineachard)