Making the Case for Cotton Over Man-Made Fibers

It's been an eventful week or so, a little over a week, over in Washington, DC.

As you may have heard, the Chinese delegation, led by Chinese President Xi Jinping, help me with that one, uh, wrapped up their visit to Washington, DC.

We actually spent last podcast touching a little bit on this topic, the topic of a potential trade deal between the United States and China.

If you recall, my guest last episode was market analyst Mr. Herman Kohlmeier, who is, uh, an excellent interview.

He was not bullish on the idea that we would come away with a deal that was helpful to cotton.

Uh, and no sooner than we hit publish on that episode, news started to break last week that there was something resembling a trade agreement coming out of that meeting.

Now, it's noteworthy here, uh, to me with my, you know, my journalism pocket square or, or pocket pen sort of nerdy way, outlets like Reuters were not using the word agreement to describe what happened here.

Instead, they used the word consensus.

So, uh, that result, uh, the result of this consensus, we'll call it, was that both sides agreed to tariff reductions in $30 billion in ag and non-sensitive products.

Now, that was going both ways, so $30 billion in cuts from the Chinese on American products and $30 billion in American tariff cuts on Chinese products.

So, uh, an important note for our purposes, for the purposes of the Cotton Companion Podcast, the US-China Board of Trade, which is an outfit that was created earlier this year to help get a trade deal across the finish line between these two nations, they recommended, they came up with a list, uh, recommending some 1,600 products that should be considered or would be considered for, quote, "reduced tariff treatment." Uh, and wouldn't you know it, cotton did make the cut.

Uh, cotton was among the ag products.

There were several others, including corn, wheat, and sorghum, who did make the cut.

Notably, soybeans did not.

Soybeans glaringly did not make this list.

Soybeans have always been kind of a particular interest to the Chinese, dating back to the first round of Trump trade war tit for tat stuff with China back in, like, 2018, 2019.

Seemed like soybeans were always kind of in the headline with the Chinese back then.

Notably, soybeans not on this list.

Regardless, we did make the cut, for what it's worth.

Cotton made the cut.

We should pay attention to the fact here that there was no mention of any sort of number in terms of how much of a reduction in tariffs would be on the table.

Uh, so we have no idea what tariff reduction treatment means from a percentage figure.

Uh, there was also no mention of a start date for when any reductions could take place.

Uh, so a lot, a lot of questions coming out of this consensus.

Again, not an agreement.