Could cotton linter import from US shrug off tariff action?

Following a 10% tariff increase on Chinese imports by the United States on Feb 4, and there was another 10% tariff increase on Mar 4. China has expressed strong opposition, believing that the U.S. action undermines global trade rules, and has taken countermeasures, imposing tariffs of 10-15% on some goods originating from the United States, such as cotton, corn, and soybeans, starting from Mar 10.

Affected by factors such as Sino-U.S. relations and downstream demand, the import volume of U.S. cotton linter has fluctuated greatly in recent years. Due to the impact of the Sino-U.S. trade war and reciprocal tariffs, the import volume of U.S. cotton linter sharply decreased in 2018-2019, with a decline of about 50-60%. Afterwards, with the easing of the situation, the import volume increased significantly since 2020, reaching the highest in 2021, at about 17,687 tons, continuing to increase by 54% year-on-year. In 2024, the import volume was about 3,412.2 tons, an increase of 119.1% year-on-year. It is expected to decline again this year.

The average import price of U.S. cotton linter in 2017 was about $851/mt, which was 41.2% higher than the national average import price. Afterwards, the import price of U.S. cotton linter fell rapidly, reaching a periodic low in 2021, with an average of about $470.2/mt, which was 22.5% higher than the national average. In 2024, the import price was about $678.2/mt, about 54% higher than the national average.

Although the average price of U.S. cotton linter is relatively high, significantly higher than the national average import price, it is still favored by downstream refined cotton and nitrocellulose enterprises due to its product quality and end-user demand. Affected by large fluctuations in import volume, the import share has also experienced significant fluctuations. Due to the Sino-U.S. trade war in 2018-2019, the import share of U.S. cotton linter decreased from 10.1% in 2017 to 2.5% in 2019. In 2020, the share rebounded to 15.7%, which was at a relatively high level. In 2024, the import volume accounted for about 3.6%.

In addition to imposing 10% tariffs on Chinese imports twice this year, the United States has also imposed 25% tariffs on products imported from Canada and Mexico, and has also threatened to impose 25% tariffs on the EU. The U.S. actions have disrupted global trade, damaged major economic partners, and increased uncertainty in global economic growth, which has been widely opposed by various countries. Canada, Mexico, and China have stated that they will not back down in the trade war initiated by the United States and have successively taken necessary countermeasures. the Customs Tariff Commission of the State Council issued an announcement on Mar 4 that, starting from Mar 10, tariffs will be imposed on some goods originating from the United States: a 15% tariff will be imposed on cotton, chicken, wheat, and corn, and a 10% tariff will be imposed on sorghum, soybeans, pork, beef, aquatic products, and dairy products. Currently, cotton linter is not on the list of tariff increases, but if trade frictions continue to escalate or expand in scope in the future, there is still some uncertainty.