WASHINGTON — Apparel and textile imports from China jumped 7.5 percent in July compared with a year ago to 1.7 billion square meter equivalents, the Commerce Department reported Tuesday.
The increase was the result of a 15.2 percent rise in textile imports, but also was helped by a favorable comparison with July 2005, when embargoes on certain Chinese goods kicked in.
Apparel and textile imports from all countries were up 4.8 percent for the month to 4.6 billion SME.
Overall, the Commerce Department reported that higher oil prices helped push the trade deficit in goods and services to a new record of $68 billion in July, up from $64.8 billion in June. The deficit with China in goods trade was $19.6 billion, down from $19.7 billion the previous month.
“Near term, the ballooning trade deficit will tax third-quarter growth by about two-tenths of a percentage point,” Peter Morici, professor at the University of Maryland’s Robert H. Smith School of Business, wrote in a report. “In large measure, the trade deficit remains stubbornly high because the overvalued dollar pushes up imports of Chinese and other Asian manufactures and handicaps U.S. exports of durable goods and high-end services.”
Apparel and textiles have been an area of particular growth for Chinese producers, so much so that U.S. producers pushed for, and won, restraints.
In November, China agreed to three years worth of quotas on 34 types of goods, from knit fabric and sewing thread to sweaters and cotton knit shirts. Quota categories made up 9.7 percent of total apparel and textile imports from China in July.
Those quotas, however, have been slow to fill and apparel imports from China fell in 3.2 percent in July to 624 million SME.
China allocated 70 percent of the quotas to prior exporters and auctioned the balance, causing some problems and the slow fill rates, said Nate Herman, director of international trade at the American Apparel & Footwear Association.
“The quota prices were much higher than they should have been,” Herman said of the auction.
In addition, he said some producers were not able to use the quota they bought, prompting the Chinese government to collect the unused quotas in August and reallocate them.
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Even with that hiccup, China is still comfortably the largest apparel importer to the U.S., with shipments four times greater than those of its closest rival, Mexico, which saw apparel shipments to the U.S. fall 11.6 percent to 132 million SME in July.
The quotas on China, which last until the end of 2008, seem to have funneled business to countries such as South Korea, Pakistan, India and Indonesia, which were the major centers of growth in July. Other countries, including Mexico and Canada, have not seen such benefits from the restrictions on China and posted declines for the month.