American cotton is facing a tariff-induced crisis. Cotton was among the first round of agricultural commodities China hit with retaliatory tariffs in summer 2018. Prices have been slowly declining ever since. And, this summer, it dropped below the level most farmers need to make any money from their 2019 harvest.

Around 2011, China began buying huge quantities of cotton. The United States exported some cotton to China during that time. By the start of 2018, China had used up most of its cotton reserves and was preparing to ramp up imports. The US cotton industry was preparing to meet the anticipated increase in demand when the tariffs hit. For the 2018-2019 crop year, the US expected to export more than three million bales of cotton to China and ended up exporting 1.6 million bales. Instead of exploding, America’s sale of cotton to China shrank — along with the value of US cotton.

Other key cotton importing nations have started to demand lower prices for US cotton, aware that American companies are becoming more desperate to sell. Also cotton acres in the US have grown by 23 per cent from last year. The sudden increase in supplies has pushed prices down further.