The European Commission has blocked imports of sweaters made in China, after limits on imports were breached a month after a quota system was agreed.
Chinese textile exports have surged since the end of global quotas
China was permitted to export 69 million sweaters to the EU from 11 June to the end of the year.
But the Commission said it had stopped issuing import licenses after 12 July because China had hit its limits.
Chinese textile exports have surged since the end a worldwide quota system in January.
"The situation is that we assume the limit as agreed with China in this category has been hit," an EU trade spokeswoman said.
"For the time being we are discussing the issue with Chinese authorities and (EU) member states."
China's full quota of sweater imports for the 2005 was 181.5 million units, although that is due to rise to 200 million next year.
China has promised to limit its rapidly growing textile trade with the West, following complaints from officials in Europe and the US that low-priced Chinese imports were damaging their own industries.
The limits were agreed voluntarily following China's accession to the World Trade Organisation and the abolition of the WTO's multi-fibre arrangement, which freed up trade in clothing and textiles between rich and poor countries.
China's growing exports have caused increasing concern in the USA and Europe, and leaders in both regions welcomed China's announcement on Thursday that it was revaluing its currency and allowing a limited float.
In the long run, the currency changes may make Chinese goods more expensive in Western markets, and prove more effective than quotas in limiting the impact of Chinese textile exports.