5:19 PM ยท 4 March 2025

Cotton sinks 4.5% to 4-year lows on China retaliatory tariffs impact ๐Ÿ“‰

Cotton futures tumbled today to their lowest level since August 2020 after China, the world’s largest buyer of the fiber, imposed new 15% retilatory tariffs on American cotton and other U.S. agricultural products. The move comes as a direct response to President Donald Trump’s decision to raise tariffs on Chinese imports to 20%, escalating tensions in the ongoing trade dispute.

The benchmark cotton contract in New York slid as much as 3.7% on Tuesday, reaching 63.12 cents per pound, as traders reacted to concerns over declining demand from China. According to U.S. Department of Agriculture (USDA) data, China remains a crucial market for American cotton, accounting for $1.5 billion in exports last year.

Other agricultural commodities targeted by China’s retaliatory measures also saw sharp declines, adding to market uncertainty. Meanwhile, the trade battle is widening beyond China—Trump’s 25% tariffs on select Mexican and Canadian imports also went into effect. Mexican President Claudia Sheinbaum announced that Mexico is preparing countermeasures, which could further impact U.S. agricultural exports, including cotton. USDA figures show that the U.S. exported $245 million worth of cotton to Mexico last year.

 

Soruce: xStation5

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