Chinese tariffs on imports of cotton from the US have been extremely destructive to the US cotton market. Cotton is a big money-making product for the United States, which exports almost all its domestic crop and is the largest cotton exporter in the world. Its biggest market area is Latin America, where cotton gets shipped to Central America to be spun into yarn and then made into fabric for clothes that come back to the United States. The country’s second-largest cotton export area is northeast Asia.

With tariffs making US cotton cost more, Chinese cotton importers are looking to other countries—including Brazil, Australia and India—to fill their needs at a lower cost. Brazil is the country that everyone is expecting China to buy from. Brazil is preferred because, like the United States, it uses machines rather than hand labor to harvest its cotton, resulting in less debris in the picked cotton.

Brazil is trying to gain more market share in China by upping its cotton production by 19 per cent. For the 2018-2019 crop season, the country is expected to harvest 11 million bales of cotton. The tariff problem comes at a bad time because China will probably have to import more cotton this year than in previous years. China’s cotton inventory last year was less than 6.5 million tons, which is half the reserve it had in 2014.