This article examines the impact of the quota phase-out effect on apparel trade between the United States and China post-2005 quota eliminations. To achieve this goal, several critical variables associated with the U.S. import volume of apparel from China are identified and studied. These variables, including quota price, tariff rate, labor costs, and freight costs are analyzed to determine the extent to which they influence the import volumes. From the research results, the researchers postulate possible changes post-2005 in U.S. apparel imports from China and provide beneficial information to the U.S. retailing industry in terms of sourcing opportunity with China's apparel industries, pending possible safeguards through 2008. Implications of past utilization rates and quota limits for U.S. retailers' sourcing of Chinese apparel products are drawn. The research finds that quota prices and tariff rates most often significantly influence the trade pattern of the selected apparel groups and that quota removal boosts U.S. apparel imports from China.
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