Cotton futures tumbled to steep losses Friday as fears of a U.S.-China trade war intensified, with most-active December falling to a seven-session intraday low.

December lost 311 points to settle at 89.85 cents, near the low of its 328-point range from 92.80 to 89.52 cents. It finished on its lowest close since May 25 and lost 275 points for the week.

Spot July shed 269 points to close at 90.72 cents on the last trading day for July options. It traded within a 264-point range from 93.14 to 90.50 cents and finished on its lowest close since June 5, down 269 points for the week.

China’s government said it will retaliate for President Donald Trump’s tariff hike on Chinese goods by immediately imposing penalties of the “same scale” on American goods, The Associated Press reported.

A Commerce Ministry statement was reported to have given no details of what U.S. goods would be affected, but possible targets announced earlier had included a 25% duty on cotton.

Volume increased to an electronically estimated 67,000 lots from a cleared 48,780 lots the prior session when spreads accounted for 24,907 lots or 51%, EFS 3,750 lots and EFP 336 lots.

The escalating trade tensions between the world’s largest cotton exporter and the largest cotton consumer overshadowed the weekly on-call report from the Commodity Futures Trading Commission.

Mills priced 8,853 lots in July last week to reduce their outstanding sales there to 25,797 lots, the CFTC report showed. Producers priced 155 lots to shave their unfixed July position to 2,726 lots. The net call difference declined 8,698 lots to 23,071, still 31.8% of July’s open interest, with 10 trading sessions left at the time to first notice day.

Meanwhile, heavy spread activity earlier this week featured inverted July-December, which traded as narrow as 40 points, and included active bidding up of December 2019. That “red” December finished with the market’s largest gain on Wednesday, up 119 points to 84.30 cents, after hitting a new contract high at 84.50 cents.

The strength in the “red” contract appeared tied to speculative buying, likely linked to long positions being liquidated in spot July, said Jobe Moss, head of Moss Capital Management in Lubbock.

“Many times spec traders will sell short in a next crop year against long positions in the current crop year in order to lower margin requirements to roughly a third of the amount of an outright long position,” he said.

Because new-crop months normally don’t move with the velocity of the spot month, this strategy is often a popular mechanism to lower margin requirements, the veteran cotton trader added.

Certified stocks grew 1,695 bales to 82,285 on Thursday, the daily ICE report showed. Open interest declined 1,321 lots to 309,292, with July’s down 4,774 lots to 39,425 and December’s up 1,896 lots to 198,436.