Industries Call For New Curbs On China Trade

US Department of Commerce (DOC) international trade data indicating China’s trade deficit with
the United States could top $200 billion has triggered new calls by manufacturing industries,
including textiles, for new measures to limit the growth of Chinese imports. The DOC announced the
trade deficit with China in November 2005 reached $185.3 billion putting it on the course to reach
more than $200-billion for the year.

The American Manufacturing Trade Action Coalition (AMTAC) reacted sharply to the announcement
saying the only way to reign in the “job-destroying deficit” is for the US government to
demonstrate it will no longer permit unlimited access to the US market. AMTAC’s executive director
Auggie Tantillo said: “Enough is enough. China is now one of the world’s five largest economies. It
is a developed, albeit non-market economy that runs a massive trade surplus with the United States.
Meanwhile, the United States has hemorrhaged nearly three million manufacturing jobs over the past
five years — with China as one of the chief culprits causing the job losses.”

Tantillo called on Congress to pass
the Schumer-Graham legislation that would impose a 27.5-percent tariff on all Chinese imports in
order to help offset what textile manufacturers contend are unfair subsidies for their exports. He
also said that in light of the true size of China’s economy the United States should not allow
China to claim developing country status in the on-going World Trade Organization trade
liberalization negotiations.

Senator Charles E. Schumer (D-NY), co-sponsor of the legislation, said China’s
refusal to play by the rules of international trade “cripples our ability to compete on a level
playing field,” and he said “the trade deficit should be a red light to the Congress and global

The Washington-based China Currency
Coalition, which includes textile companies, charged that China continues to undervalue its
currency, giving Chinese goods an “unfair advantage” in the marketplace. Stating that China “does
not play by the rules,” the coalition’s trade counsel, David A. Hartquist, said “China’s
undervalued currency is a stealthy way of subsidizing its exports to the United States while taxing
US exports to China.” He said China’s “much-touted” appreciation of its currency last July has had
no positive impact on US trade or manufacturing, although some administration officials and
economists said it was a step in the right direction.

January 1, 2006