BEIJING hit back last night against US$19 million (HK$146.8 million) in trade sanctions announced by the United States, vowing to retaliate unless the punitive action was dropped. Washington has slashed China's textile export quota by 195,001 dozen garments, accusing it of illegally trans-shipping goods through third countries like Hong Kong to avoid paying tariffs. The action would cost China US$19 million in new tariffs and incur back charges of US$80 million from the time the original 1994 quota deal between the countries was signed. China has denied the charge and demanded evidence from Washington to back up its unilateral action, announced on Friday by acting US Trade Representative Charlene Barshefsky. The sanctions follow a US Customs Service investigation which, Ms Barshefsky said, showed that Beijing had worked aggressively to circumvent the quota agreement by illegally shipping more than two million garments through Hong Kong, Mongolia, Fiji, Turkey and three other countries. Products targeted by the sanctions included sewing thread, cotton coats, cotton knit shirts, cotton trousers, pyjamas, tea towels, men's wool jackets, man-made fibre blouses, and silk blend and non-cotton shirts and blouses. A spokesman for the Ministry of Foreign Trade and Economic Co-operation said: 'The Chinese Government firmly refuses to accept the US action. 'We hope the US Government will take a stand conducive to developing Sino-US trade by reconsidering the decision.. 'Otherwise the Chinese Government will be compelled to make a necessary response.' Hong Kong is already facing clamps on shipments to the US that affect about 10 per cent of its trade with the country. US Customs recently put a watch list on four more categories of Hong Kong garments, bringing to 14 those on the list for illegal shipments. The new sanctions against China are likely to hurt the territory even more. 'The major problem for Hong Kong companies is that these sanctions are coming at such a late stage. It's already September, and there are just three more months before the end of the quota year,' said Willy Lin, the chairman of Hong Kong's Exporters' Association. 'Traders here have already put in their orders to companies in China, and they will now have to make some contingency plans if they've exceeded the quotas.'