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China to increase export tariffs

Beijing rejects calls to revalue currency

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BEIJING, China -- China will drastically raise export tariffs on 74 categories of textile products beginning June, the government has said, in an apparent effort to meet U.S. and European demands to stem the flood of cheap Chinese goods.

The increase could be as much as 400 percent for most of the products, the Xinhua News Agency said in a one-sentence dispatch, according to The Associated Press.

No other details were given.

China faces pressure from the United States, the European Union and other producers to restrain its textile exports, which have soared since a global quota system ended on January 1.

The United States on Wednesday imposed quotas to limit growth of Chinese imports to 7.5 percent a year.

They apply to men's and boy's cotton and man-made fiber shirts, man-made fiber trousers, man-made fiber knit shirts and blouses, and combed cotton yarn.

On May 13, Washington imposed similar restrictions on Chinese-made cotton trousers, cotton knit shirts and underwear.

The limits come a day after the U.S. Treasury pointedly called for Beijing to allow a revaluing upwards of its currency, the yuan, which the U.S. says is giving an unfair advantage to Chinese manufacturers.

Chinese clothing imports, including man-made fiber shirts and blouses, will now be subject to quota limits, according to a U.S. Commerce Department release.

Last Friday the department put quotas on cotton trousers and knit-shirts and a range of underwear.

The latest restrictions demonstrated "the administration's continued commitment to America's textile manufacturers and their employees," Commerce Department Secretary Carlos Gutierrez said in a statement released Wednesday.

"We will enforce our trade agreements to ensure that U.S. companies get a fair deal as they compete in the global marketplace," he said.

The department said the clothing categories cited were threatening to disrupt the U.S. market.

Shipments of Chinese textiles and apparel to the U.S. have surged since the end of global quotas on January 1.

Last year the U.S. ran up a $162 billion trade deficit with China.

U.S.-based manufacturers say China's system of pegging the value of the yuan at around 8.28 to one U.S. dollar undervalues the Chinese currency by as much as 40 percent.

An artificially weak yuan makes Chinese goods cheaper in the U.S. and American products more expensive in China.

The U.S. Treasury said Tuesday that if China yuan policy was "highly distortionary" and posed a risk to China's economy, its trading partners and global economic growth.

China has rejected the suggestion that it should immediately allow its currency to revalue.

Chinese Commerce Minister Bo Xilai said Wednesday the charges made by the U.S. Treasury were unfounded.

"I believe they are not reasonable," Bo told Reuters.

The latest U.S. quota move will see the named import categories to increase this year by just 7.5 percent compared with shipments over a 12-month base period.

The U.S. has the power to set the limits on Chinese goods under an agreement that cleared the way for Beijing's membership in the World Trade Organization in 2001.

The American Manufacturing Trade Action Coalition, a textile industry group, praised the move Wednesday.

"Failure to act would have cost tens of thousands of U.S. jobs," the group's executive director, Auggie Tantillo, said, according to The Associated Press.

But Laura Jones, executive director of the United States Association of Importers of Textiles and Apparel, was critical.

"These restrictions on imports from China will do absolutely nothing to help the U.S. textile industry -- and the government knows it," AP quoted Jones, whose group includes large retailers, as saying.

Copyright 2005 CNN. All rights reserved.This material may not be published, broadcast, rewritten, or redistributed. Associated Press contributed to this report.

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