By Justin Walker
Communications Specialist
Tensions between the U.S. and China continue to rise, and newly proposed tariffs take aim at more U.S. commodities, including cotton.
On Wednesday, Chinese officials released a new list of imports from the U.S. that would be hit by 25 percent tariffs. The 106 items include cotton, corn and beef. The U.S. goods impacted by the proposed levies are worth about $50 billion.
According to officials, an implementation date has not yet been announced as China awaits President Donald Trump’s tariff plans.
The announcement is a blow to the United States’ cotton sector. The 2017 marketing year for U.S. cotton, which runs from August to July, saw China as the second largest importer of the crop. More than 2.5 million bales were sent to the Chinese market during that time period, accounting for 16 percent of total exports. Only Vietnam received more.
As of March 22, China had accounted for roughly a quarter of all 2018 cotton exports.
Dan Smith, a cotton farmer in Floyd County and a Texas Farm Bureau (TFB) state director, said the tariffs would put Texas cotton farmers in a tighter position financially.
“There just wouldn’t be a demand for (cotton),” Smith said in an interview with the TFB Radio Network. “Demand would be cut quite a bit.”
Smith said cotton is extremely important to the Texas economy.
“It’s the number two commodity, behind beef cattle,” he said. “It’s not just a major agricultural industry, it’s a major industry in the state of Texas.”
Smith believes the tariffs would be a big loss to the state and could lead to the loss of farms and jobs.
American Farm Bureau Federation President Zippy Duvall released a statement on the tariff announcements, saying the trade disputes will have a negative effect on farm and ranch families.
“Farmers and ranchers are, by necessity, patient and optimistic,” Duvall said. “We know markets ebb and flow. But China’s threatened retaliation against last night’s U.S. tariff proposal is testing both the patience and optimism of families who are facing the worst agricultural economy in 16 years.”
Markets immediately saw an impact by the announcement, despite the tariffs not being implemented yet. Dow Jones dropped 2 percent at the opening bell and Hong Kong’s Hang Seng Index fell 2.2 percent.
Duvall stressed the ongoing trade disagreements are putting American farmers and ranchers in a dangerous situation.
“We have bills to pay and debts we must settle and cannot afford to lose any market, much less one as important as China’s,” Duvall said. “We urge the United States and China to return to negotiations and produce an agreement that serves the interests of the world’s two largest economies.”