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Status Quota?

Without trade quotas, U.S. textile-makers struggle.

This story appears in the September 2005 issue of Entrepreneur. Subscribe »

George Shuster, CEO of Cranston Print Works Co., likes to sayhis company "opened before Nixon did." TheCranston, , textile company, Shuster says, wasimporting raw materials from China even before Nixon's 1972diplomatic breakthrough ended decades of Cold War silence betweenthe countries. "They call us an old, good customer, and an oldfriend," Shuster says of his Chinese suppliers.

Despite the friendship, China's role in the industry hasShuster concerned these days, and many other U.S. textile companiesterrified. When a global system of trade quotas expired at the endof 2004, Chinese imports surged in the United States. In somecategories, imports of T-shirts, pants and other textiles jumpedmore than 1,000 percent through the spring months. Dozens offactories closed their doors, blaming the tidal wave of low-costcompetition. Finally, in May, under pressure from factory ownersand labor unions, the U.S. imposed new quotas limitingyear-over-year increases in Chinese textile imports to 7.5percent.

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