Apparel Sourcing Intelligence - Worldwide

US/China: What happens next?

China’s first reaction to the collapse of talks with the US was to hint at taking the US to the WTO’s appeals procedures. The official Xinhua news agency cited Mei Xinyu, an official with China's Commerce Ministry, as saying that China would look at ways to curb US restrictions against its exports. Any such procedures would be lengthy, and it is unlikely China would win. Whatever the arguments for or against temporary quotas, there seems no serious doubt over the legality under WTO rules of the quotas the US has so far imposed. China seems now to have signalled its lack of interest in an EU-style agreement on any terms the US is likely to accept. If so, the issue for the US Administration is how it should handling pressure from Congress to enact a range of sanctions currently proposed in different Bills, including a 27% import duty on Chinese goods if China does not sharply revalue its currency still further. Most observers believe, however, that the US will postpone any serious escalation – and that Congress will not formally debate any anti-Chinese proposals – until after George Bush visits China in November. In the meantime however, the US has a wide range of petitions pending for further quotas to bring further pressure on China if necessary. With lobbyists threatening still more, this is a list of petitions for quota still to be decided on as of October 14.