NORTH CAROLINA – A market update by Cotton Inc suggests the US presidential election and ongoing geopolitical shifts are creating fresh uncertainties in the global cotton market. The organisation’s latest analysis highlights that the re-election of Donald Trump, with his proposed tariff increases, could trigger another round of adjustments for global textile supply chains and lead to significant consequences for cotton prices worldwide.
President Trump has pledged to raise tariffs on goods from various countries, including a proposed increase to 60 per cent on imports from China. Cotton Inc. warns that these moves may disrupt international trade and increase costs for retailers, who may rush to secure cotton-based inventory before tariffs take effect. These heightened sourcing costs could deter future orders, creating a ripple effect across the textile industry and impacting cotton demand globally.
The impact on US cotton producers could be particularly severe if China retaliates, as it did during the 2018 tariff escalations. In response to earlier US tariffs, China imposed tariffs on American cotton, leading to decreased demand from one of the US’s largest cotton buyers. Cotton Inc. analysts suggest that if the US moves forward with further tariffs, China may again turn to other cotton-producing countries to fulfil its needs.
Global cotton supplies are expected to remain high. Major producers, including Brazil, Australia, and West Africa, are all forecast to produce record amounts of exportable cotton in 2024/25. The US itself is expected to increase output despite recent weather challenges, which has contributed to the current downward pressure on cotton prices. However, since 2022, sluggish demand—driven by global inflation and high interest rates—has also limited price recovery.
Meanwhile, central banks are easing interest rates slightly, which Cotton Inc. notes may help soften economic pressures. However, rates remain high, acting as a brake on growth. China’s recent US$1.4 trillion stimulus package could stimulate domestic market, but whether it boosts global demand for cotton remains uncertain. The cotton industry is likely to remain volatile as it awaits greater clarity on trade policies and economic recovery.
Cotton Inc., a US-based research and marketing organisation funded by cotton growers, focuses on supporting the cotton industry through market analysis, consumer education, and supply chain initiatives.