The cotton market has been falling recently, and the main contract price of Zheng cotton has fallen to around 19,000 yuan/ton. Whether the market outlook will continue to fall below this support is currently a possibility. After a sharp short-term decline, the market needs to digest and re-accumulate energy.
There have been rumors in the market recently that the United States is considering lowering tariffs on Chinese goods in order to control inflation. Of course, investors are also continuing to pay attention to the progress of this news. An enterprise engaged in foreign trade export processing said that the current tariff for Chinese enterprises exporting textile and clothing products to the United States is 9.6%, and an additional 7.5% tariff is levied; the tariff for exporting to EU countries is 12%, but the tariff for competitor India is 9%, Turkey, Pakistan, Bangladesh and other countries have zero export tariffs. From the tariffs, it can be seen that my country’s textile and clothing exports have encountered unfair treatment. From the perspective of the tariff rate, even if the United States wants to reduce tariffs, the extent to which it can be reduced is very important, because the tariff rates imposed on China by the US and European markets are very high, and the reduction effect is not obvious.
The author here emphasizes that the above situation is a hypothesis. On the contrary, the author believes that the probability of the United States reducing tariffs on Chinese textiles and clothing is very low. First, the United States officially took effect on June 21st with the “Prevention of Forced Uyghur Labor Act” and will implement an import ban on cotton and its products from China’s Xinjiang region in accordance with the act. This means that the United States cannot lower these prices any more. Tariffs on goods.
According to the actual sown area surveyed by the National Cotton Market Monitoring System of 43.191 million acres, the national total output is estimated to be 5.801 million tons, of which Xinjiang’s output is estimated to be 5.262 million tons, accounting for 90.7% of the national total output. Due to the limited amount of real estate cotton production and imported cotton, most of China’s cotton textile products use Xinjiang cotton, so banning Xinjiang cotton basically means banning most of China’s cotton textiles. Therefore, even if the United States reduces tariffs, it will have a very limited impact on Chinese cotton textiles and cannot change the weak state of the cotton market. On the contrary, it may bring benefits to the export of some chemical fiber products, which will further encourage companies to increase the use of chemical fibers.
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