U.S. to limit China clothing imports

WASHINGTON -- The Bush administration announced Tuesday it will limit clothing imports from China to protect struggling U.S. companies.

The action was the latest response by the administration to America's soaring trade deficit with China, which hit a record $103 billion last year, and which American manufacturers believe is largely to blame for the hemorrhaging of U.S. factory jobs over the past three years.

"Clearly, the enormous surges we have seen in Chinese imports in these categories, and the damage they have caused to our industry, workers and communities warranted such action," said Cass Johnson, head of the American Textile Manufacturers Institute.

Critics warned that the decision would drive up the cost of clothing in American stores. Trade expert Gary Hufbauer of the Institute for International Economics said protections already in place for textile and apparel companies cost the typical American family $400 in higher clothing costs annually.

"The textile decision is very disappointing for people who believe in open markets and competition and who are opposed to regressive taxes on low-income Americans, which is what clothing protection amounts to," said Brink Lindsey, a trade expert at the libertarian Cato Institute.

In another trade dispute, the administration was exploring possible compromises that would avert $2.2 billion in threatened European sanctions against a wide array of U.S. exports from orange juice to pajamas. They are to go into effect in mid-December if the United States does not agree to remove tariffs it imposed in an effort to protect the domestic steel industry, according to trade experts close to the talks, who spoke on condition of anonymity.