Clothes-hanger war leaves US producers bent out of shape Trade spat emerges after manufacturers demand protection from Chinese imports.

(From South China Morning Post)

Byline: Tom Mitchell

Last month, United States President George W. Bush won a war, dispatched an envoy to Beijing to deal with yet another North Korean nuclear crisis and signalled his intention to reappoint Alan Greenspan as head of the Federal Reserve.

He also stared down America's clothes hanger industry, which was demanding protection from an alleged surge in Chinese imports.

The industry petition, filed through the US International Trade Commission (ITC) under Section 421 of the Trade Act, was only the second of its kind and demonstrated that China's accession to the World Trade Organisation (WTO) had not put an end to the Sino-US trade spats that punctuated the 1990s. It had merely shifted them to different fields of battle.

Section 421 is one of these key new battlegrounds. Stemming from a surprisingly audacious concession secured by the US in its bilateral WTO accession negotiations with China, the so-called "safeguard mechanism" allows America to unilaterally raise tariffs or impose quotas on Chinese goods that the ITC finds are "being imported into the US in such increased quantities or under such concessions as to cause market disruption to domestic producers".

Unlike anti-dumping cases, where US industry must prove that Chinese goods are being sold at below-cost …