Us And Canada Impose Tariff Delays: Short Term Benefits To Cotton Price Rebound, Long Line Overdraft Cotton Price

According to the Wall Street journal, the trade agreement between the United States and China will include a complicated enforcement mechanism. Under this mechanism, the United States will conduct normal consultations with China. If China fails to commit itself, the United States will also retain the right to assess tariffs.

It is noteworthy that the US - DPRK Vietnam meeting has not reached any agreement, the differences between the two sides are still very big and the situation of the India and Pakistan is steeply rising, and President Trump warned that if the trade agreement with China is not good enough, he may give up.

Therefore, although China and the United States have reached a consensus on trade negotiations, their prospects are optimistic, but the process is tortuous and the end of the trade war is too early.

According to industry analysis, postponing the March 1st deadline to increase tariffs on more than 200 billion dollars in China's exports to the United States will help to ease investors' concerns about the aggravation of trade tensions. For my textile and clothing companies and foreign trade companies, it is a good and visible short-term (according to people familiar with the matter, President Trump is considering extending the deadline for higher tariffs on Chinese imports for 60 days), which will play a positive and stimulating role for domestic high quality cotton production and marketing, gauze and clothing enterprises to take orders from Europe and the United States, but the actual effect needs to be observed.

The author believes that the US side's duty to postpone the release of only favorable signals should be treated with caution.

First, the US $200 billion delay in importing tariffs is only temporary. The key lies in whether China and the United States can make substantial progress in the buffer period and sign a memorandum of understanding (MOUs). (Gic Trump's request for "agreement").

From the point of view of the author, the United States delays the Levy of tariffs is a temporary act, and the US side is more inclined to be willing to impose tariffs as a "sword" hanging on the Chinese side. If China fails to make a commitment, the United States will retain the right to assess tariffs.

For Chinese enterprises, if they do not levy tariffs, they only have a 60 day "pition period" and "the initiative of assessment is still in the hands of the US". Exports of textiles and clothing are only short term positive ones. Export-oriented enterprises still dare not take up long-term US export orders, and can not arrange production in advance. There is little change in worry, anxiety or even panic.

Second, the short term is conducive to ICE, Zheng and cotton spot rebounding at home and abroad, to speed up the "unwinding" and profit making process of cotton enterprises, but the middle and long lines have some overdraft on cotton prices.

First, American trade negotiator Lai TSE Chi confirmed that China had bought cotton products on the list of US agricultural products, but the specific agreement had not yet been reached, so the number of buyers had not been announced. Secondly, the issue of RMB exchange rate became the focus of Sino US game.

A spokesman for the Ministry of Commerce said that the seventh round of Sino US trade negotiations made substantial progress in specific issues such as technology pfer, intellectual property protection, non-tariff barriers, service industries, agriculture and exchange rate. The wide fluctuation of exchange rate has a great influence on the import and export of textiles and clothing in China. Thirdly, the signing of the US cotton export contract in 2018/19 accelerated, which contributed to the growth of the planting area of the United States, India and other cotton producing countries in 2019, and played an important role in promoting the price rebound.