The U.S. cotton sector is now at the mercy of the Chinese buyer as China’s role in global cotton trade continues to expand. If the U.S. is to export 16 to 17 million bales, China will be required to purchase 8 to 9 million bales of that volume. Against this backdrop, the continued trade friction between China and the U.S. is a major issue. Among the various points in trade disputes between the U.S. and China, none is as sensitive to the cotton industry as the one dealing with China’s textile and apparel exports to the U.S.

New trouble lurks around the corner for China’s booming textile and apparel exports to the U.S., with the potential filing of the first countervailing duty case against imports of Chinese apparel. There are reports in the industry that the National Council of Textile Organizations (NCTO) is working on a CVD case. Such a case could force China to negotiate new textile and apparel import quotas to the U.S. after 2008; however, one obstacle to the case is that few, if any, U.S. manufacturers produce a direct product that is competitive with Chinese imports. This is the reason that the prevailing negotiated textile and apparel import quotas have not benefited the remaining U.S. industry, which has continued to shrink since they were implemented.