Meanwhile in the War on Trade Relations

Disaster in Cancun over crop subsidies.
Facing sanctions on trade from the European Union over steel tariffs.
U.S. companies told to close down British plants and come home.
And now: textile quotas slapped on China.

The Bush administration said it will impose new import quotas on Chinese clothing, opening a new line of attack against Beijing's trade policies and moving to protect American jobs.

The American textile industry praised the decision on Tuesday to impose quotas on knit fabrics, brassieres and dressing gowns. But it said this should merely be a first step toward putting a lid on virtually all of China's textile imports...

The U.S. move, against a country already facing trade challenges from Washington, was not roundly applauded.

An International Monetary Fund senior advisor for Asia, Steven Dunaway, called the quotas "a big risk in the current environment" and one that could prompt Chinese retaliation.

"Concerns over U.S. protectionism in terms of trade and the announcement today that they were implementing some textile tariffs, sent the market reeling," said Hugh Walsh, vice president of foreign exchange at Fortis Bank in New York.

Word of the quotas caused the dollar to get battered against all major currencies on fears of growing U.S. protectionism with China, which operates a huge trade surplus against the United States. article