NCC: Tariffs Would Undermine U.S. Cotton Trade with China

MEMPHIS, Tenn. -- The National Cotton Council is concerned that China’s announcement of significantly higher proposed tariffs on U.S. raw cotton shipped to that country would significantly harm the economic health of the U.S. cotton industry.

For the current 2017 crop year, China stands as the second largest export market with purchases of approximately 2.5 million bales of U.S. cotton. 

"I cannot overstate the importance of China’s market to U.S. cotton farmers and the importance of U.S. cotton in meeting the needs of China’s textile industry," NCC Chairman Ron Craft said. "The cotton industries of the United States and China enjoy a healthy, mutually beneficial relationship."

According to the USDA Foreign Agriculture Service GAIN Report, cotton has been listed among multiple U.S. agricultural products that could potentially be hit with higher tariffs from China -- specifically an in-quota tariff that would increase from one percent to 26 percent. Following the announcement, the cotton market reacted accordingly – almost limit down on nearby contracts.

The GAIN Report noted that China's proposal of retaliatory tariffs on selected U.S. agricultural products is in response to the recent U.S. proposed tariffs on Chinese imports resulting from the Section 301 investigation into the forced transfer of U.S. technology and intellectual property.

Craft said the NCC strongly encourages the two governments to engage in immediate discussions "that can resolve trade tensions and preserve this long-term collaborative relationship. The U.S. cotton industry stands ready to assist the U.S. government and our trading partners in China to find a resolution to this damaging trade dispute.”