By Ryan Dezember
Cotton futures fell to their lowest level in five years after Trump touched off a global trade war with steep tariffs—particularly on big U.S. cotton buyers China, Vietnam and Pakistan.
- Cotton futures for delivery next month traded below 62 cents a pound on Friday, the lowest price since the pandemic market crash five years ago.
- Even before the tariff shock, prices have declined steadily since 2022, when drought propelled big gains. U.S. farmers are expected to plant nearly 12% fewer acres with cotton this year than they did last season, which would be the smallest crop in a decade, the U.S. Agriculture Department said last week.
The U.S. is both a major cotton grower—accounting for 12% of world production—as well as a voracious consumer of cotton products. But it relies on other countries with which trade relations have frayed to turn bales of cotton into t-shirts, towels and bed sheets.
Those countries are some of same ones that Trump hit with the highest tariff rates. China bought $5 billion of U.S. cotton last year, but imports from there will be taxed at 54%, the White House said. China has vowed retaliation, which analysts say might include turning to Brazil for cotton. The tariff rate is 46% for Vietnam, though Trump said he's talked to leader To Lam about a deal.
The other problem for cotton growers is the plunging price of oil, which has dropped roughly 10% this week to trade at the lowest prices since 2021. Cheaper oil means cheaper petroleum-based fibers such as spandex, polyester and nylon, and stiffer competition for cotton.
