"Free trade agreements require people honouring the agreements. There are market disruptions involved with certain Chinese textiles", US President George Bush told a news conference in London on Thursday.

"We are addressing those disruptions and we look forward to visiting with our Chinese counterparts on this particular matter."

Bush also said he would make a "timely" decision on the dispute over US steel tariffs, which have been declared illegal by the World Trade Organisation, and admitted British Prime Minister Tony Blair had pressed him over the trade row. 

"In terms of the steel issue, it is an issue the prime minister has brought up not once, not twice but three times. It's been on his mind, it is also on my mind," Bush said.

"I am reviewing the findings about the restructuring of our
steel industry," he said. "I am looking at the findings right
now and will make a timely decision."

Escalating tension

China said on Thursday it would raise tariffs on some US
imports. Simmering tensions between the world's biggest and
fifth largest trade nations flared this week when Washington
said it would cap imports of Chinese knit fabrics, bras and
gowns.

China said it would raise tariffs on
some US imports

Linking the two trade spats, the Chinese Commerce Ministry said their new tariffs were in response to US duties on steel imports enacted a year and a half ago.

Blair said he had made Britain's stance known to the president but that steel was only a small part of "vast" trade between Europe and America.

"That is not to say we don't have to resolve these issues and I hope we can resolve them soon," the prime minister said.