Trade Deficit Alarms Textile Makers

s the US government announced the US
trade deficit in 2005 reached an all-time high of $726 billion, textile manufacturers warned the
deficit is resulting in job losses not only in textiles, but in other key manufacturing industries.
The 2005 record was $108 billion higher than 2004, and China’s role in the deficit rose to a record
high of $202 billion.

With regard to textiles and clothing, the trade deficit rose by $21 billion to a record
level of $82 billion. At the same time, textile and apparel employment fell to 639,000, a decline
of 408,000 since January of 2001. Overall manufacturing jobs fell by 2.9 million over the past five

The report triggered a call from the Washington-based American Manufacturing Trade Action
Coalition (AMTAC) for “immediate action” by the US government to restrain Chinese imports of
textiles and other products. AMTAC Executive Director Auggie Tantillo said: “Clearly the United
States must reform its trade policy with China if it is to meaningfully confront the overall trade
problem. China is one of the five largest economies in the world and is a superpower in terms of
international trade. Yet China manipulates its currency, subsidizes its banking and industrial
sector and misreports its economic numbers. Clearly China is using predatory trade practices to
destroy US jobs and factories.”

In addition to citing concerns about textile trade, Tantillo said China is becoming a major
factor in automobile and auto parts manufacturing.

While textile manufacturers are alarmed by the trade deficit, Kevin Burke, president of the
Arlington, Va.-based American Apparel and Footwear Association, said 2005 was “another banner year”
with 98 percent of all shoes and 92 percent of all clothing sold in the United States imported.
However, he expressed concern over what he called a “disturbing trend” in trade with Central
American countries as clothing imports from that area declined. He blamed a delay in implementing
the Dominican Republic/Central American Free Trade Agreement, which was targeted to be in place at
the beginning of the year. Burke said the delay is threatening hundreds of thousands of apparel
jobs in both the US textile and Central American apparel industries.

February 14, 2006