Customs Finds Illegal Chinese Apparel Shipments

US Customs and Border Protection (CBP) has identified more than 1,000 cargo containers of Chinese
apparel that it says were illegally transshipped into the United States, and it will charge the
shipments against Chinese import quotas. The containers, entering the United States in 2006 and
2007, contained more than 4 million dozens of apparel items labeled as coming from countries other
than China, but in fact, according to CBP, they were Chinese goods.

In announcing the action, CBP Commissioner Ralph Basham said: “US Customs and Border
Protection is committed to strongly enforcing our trade agreements, and we will continue to work
with members of the trade community and other federal agencies to pursue importers who make false
declarations in order to circumvent import quotas.”

CBP maintains a trade enforcement program to ensure compliance with laws and regulations
governing all imports. CBP says because there is a high risk that traders of textiles and apparel
products will attempt to avoid quota restrictions, it has designated textiles and apparel as a “
priority trade issue.”

In the current case, CBP said 11 different countries were incorrectly declared as the country
of origin for the Chinese apparel, which is valued at more than $80 million. The products were in
10 different product categories including large quantities of cotton knit shirts and cotton

The US Association of Importers of Textiles and Apparel (USAITA) took issue with the customs
action, saying it was “politically motivated.” Laura E. Jones, USAITA executive director, said, “
This is politics pure and simple. With the quotas due to end in less than six months, the CBP has
to justify the resources it has dedicated to rummaging through foreign factories and then detaining
and seizing apparel shipments since 2006.”

Saying that the shipments involved are “insignificant,” Jones said the CBP is under pressure
from the US textile industry to prove that it is protecting them.

July 15, 2008