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What happens to the import and export of cotton after customs duties?

What happens to the import and export of cotton after customs duties?

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2018/05/24
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ICE cotton futures have experienced significant volatility since April, with prices now flat or slightly lower than a month ago. Affected by China's announcement that cotton was included in the tariff list, ICE futures plunged on April 4 and recovered quickly the next day to maintain a stable trend. Currently, both the may and July contracts are around 83 cents, and the December contracts are around 78 cents. Spot prices, courtney Luke A overall stability index, swings between 90-93 cents, China's spot price is slightly weaker, India S - 6 overall stability, export price remain at around 80 cents, Pakistan's spot price from 78 cents to 84 cents and then back to around 77 cents.
Trade frictions between China and the United States have added greater uncertainty to the market. The United States issued a $50 billion tax increase on April 3, excluding textile and apparel products. On April 4th China also released a list of $50 billion in tax increases, including cotton. The us is currently working on a $100bn list of tax increases. Whether future execution will take place is currently unknown. Negotiations over the next few months will decide whether to actually raise taxes. If implemented, it will have an impact on the shape of trade.
As a result, imports of U.S. cotton are more expensive than those of other countries because of a 25 percent tariff, so China's imports of U.S. cotton will decline. However, compared with a few years ago, the increase in tariffs will not lead to much decline in U.S. cotton imports. One reason is that China has greatly reduced cotton imports in recent years, in the past two year, the beauty of Chinese cotton imports between 900000 bales to 2.3 million bales, well below the long-term historical average of more than 4 million packages. Because U.S. cotton exports to China are already low, the decline in exports will be much lower than it was a few years ago.
Although American cotton on China's exports decline, but exports to other markets will increase, Vietnam and other southeast Asian countries, in particular, last year's us history shipped quantity at the end of the second high, and exports to China accounts for only 15% of U.S. cotton exports (far lower than in the past 30-60%), suggesting that 85% of today's American cotton exports to other countries. China's demand for American cotton is in a downturn compared with 5-10 years ago.
Still, China's importance to American and other foreign cotton cannot be underestimated. China's cotton reserves have fallen sharply and the country is nearing a turning point in its massive imports. Expectations that China's imports will resume at 10-15 million bales have boosted confidence among global cotton exporters.
If the tariff proposal is finally implemented as China's cotton imports increase, it will affect U.S. exports to China. However, the exports of cotton from other areas are no more than those from the United States. So if China imports cotton from other countries, the supply of other exporting countries will be short, and U.S. cotton exports to China outside China will be pushed up.