By admin       2018-04-11

Sino-US economic ties seem to be entering a troubled time since US President Donald Trump signed a presidential memorandum on March 23 that could impose tariffs on up to $60 billion of imports from China, despite warnings from business groups and trade experts. Last week, the Office of the US Trade Representative published a Section 301 investigation report that can lead to an additional 25 percent of tariff hikes on listed imports from China worth about $50 billion in annual trade value. On Apr 4, China decided to impose tariffs on 106 items originating in the United States, the Ministry of Commerce announced. The government has chosen to add a tariff of 25 percent to 106 goods originating in the United States across 14 categories, including cotton and cotton linter, but the implementation date has not been published yet. China imported almost 34kt of cotton linter from US in 2011, taking up almost 24% of total, but the import volume was less at 6.5kt in 2016, occupying 2.8% of total. During 2011-2017, the import volume averaged at 15.5kt. Since cotton waste import ban took effect staring Jan 1st, 2018, cotton linter import from India and Central Asia reduced sharply while US linter accounts for hiking proportion. In the first two months of 2018, China imported 1,233.72 tons of cotton linter from US, taking up 23% of total. Viewed from cotton linter import from US to China, the higher volume was more than 2kt per month while the less was around 200 tons, averaging at 1kt per month. However, US linter enjoys good reputation in Chinese market by virtue of good quality, which has been favored by some specialty pulp, refined cotton and currency paper manufacturers. Meanwhile, the import price has been hovering at high level, far exceeding the average level in the same period. In 2017, the average cotton linter import price of China was around $602/mt while US cotton linter price was $851/mt. In Jan-Feb, 2018, the average price was $595.3/mt while US linter was imported at $871.8/mt, which was more than 40% higher than the average level. US is one of major origins of China’s imported cotton linter whose share is fluctuating around 10% in most times, but the absolute amount of US cotton linter is not large, with the less below 10kt, which is valued less than 5 million USD. However, its high quality is favored by some specialty pulp and refined cotton companies. If US cotton linter is officially levied a tariff of 25%, it will lose competitiveness and is hard to enter Chinese market. The implementation of tariff hikes has not been published, but participants express worries over China’s textile and apparel export to US if China-US trade war keeps heating up. In terms of value, China’s textile and apparel export to US accounts 36% of US total import. In terms of volume, the export takes up 49% of total import. If textile and apparel are involved in trade war, there will be significant impact on China and US even world trade patterns.

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