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Beijing appeases US, EU on textiles

China yesterday made a conciliatory gesture to the US and EU to ease simmering trade tensions, announcing it will raise export tariffs on 74 categories of textile products from June 1.

The Ministry of Finance said on its Web site that the 74 categories were among 148 products on which tariffs had already been placed at the end of the decades-long global textile export quota system on Jan. 1.

It also announced export tariffs on flax yarn.

"The decision was authorized by the State Council," the ministry said.

China, the world's largest supplier of textile goods and garments, currently imposes export tariffs of between two and four percent on the 148 categories, including coats and skirts, but they appear to have had little effect.

The ministry said export tariffs for most of the products will be raised to 1 yuan (US$0.12) per unit -- such as one shirt or a pair of trousers -- from 0.2 yuan.

The move came a day after Commerce Minister Bo Xilai (薄熙來) ruled out restraints on export volumes but left the door open for other measures to curb booming textile exports that have angered both the US and EU.

While China raised tariffs on 74 items, including cotton T-shirts for men and women and cotton trousers for boys, it canceled taxes for two categories of knitted garment accessories.

Taxes meanwhile were reduced on three other items including men's cotton underwear and women's chemical and synthetic fiber underwear.

China's textiles exports jumped 29 percent overall in the first three months of the year, with some categories rising much more, and pressure has been steadily building on Beijing to do more to stem the flood.

Several trading partners, especially the US, charge that China's exports benefit unfairly from an undervalued currency, the yuan, and low labor costs, linking the textile dispute in wider issues facing Washington.

In response, the EU has threatened to put restrictions on imports of flax yarn and T-shirts from China if Beijing did not show a more "constructive attitude."
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