The United States will allow American companies to carry out the anti-subsidy actions aimed at the exports from China, and it is good for textile industry companies to pave the way for trade protection. The impact for American cotton industry, which is brought by this decision, is under observation.

 Last week, American Ministry of Commerce made out the decision of anti-dumping action to against the import of Coated Paper from China. The amount of Chinese Coated Paper export had been grown 177% from 2005 - 2006. The American Ministry of Commerce’s decision rewrote the policy of imposing countervailing duty for non-singleness market economy, which is not allowed for 23 years. Ministry of Commerce said that this decision reflected the realities of economic development in China. 

One spokeswoman, came from the International Trade Administration department of Ministry of Commerce’s branch, said that they hadn’t received any complaint on the cotton finished products or textiles imported from China up to now.

Since 2001, American Ministry of Commerce has issued 31 antidumping orders against China. The Secretary of Commerce Minister said that the anti-dumping cases against China accounted for 25% of all anti-dumping orders. 

China needs American cotton

About cotton and cotton products, the United States and China has a very unique trade relation. Beijing is the biggest purchaser of cotton around the world, and the United States may actually gain more chips in this game.

Ron Lawson, the partner and cotton analyst of LOGIC consulting firm in California Napa Valley, said that compared with the need of Chinese finished products in the United States, American cottons are much more needed by China.

China must have enough cotton wool so as to consist with the developing textile industry. According to the Xinhua report, China’s textile industry’s profits represented 39% year-on-year growth in the January- February, which broke the record of 11.2 billion yuan (about 1.4 billion U.S. dollars).

American Department of Agriculture estimated that China’s cotton imports would reach 1.4 million packs in 2006-07., and China was the largest cotton import country around the world.

Meanwhile the United States is the largest consumer of cotton, and it imports about 25% of world cotton products. Some American textile industry companies may rush to prosecute the China’s dumping.

The special relationship between the United States and China may not lead to serious trade frictions between the two sides ultimately, because it involves a lot of money.

Lawson said that China won’t shut down their textile mills, they had to import cotton wool. Some large American companies, such as Wal-Mart, Kmart ?the branch of Sears industry company and Target company, would not take adverse action on Beijing. Because they were dependent on China, and they would import a majority of commodities they need. But he also said that smaller American Companies may forwardly to impose the countervailing duties against China in fact. 

It is very interesting that just at the time of a trade delegation came from Beijing to visit Washington on May 23rd- 24th, the American Department of Agriculture did the decision. This trade delegation came round to discuss the purchase plan of 12.5 billion U.S. dollars’ goods.

Lawson said: “The layout in this game of chess is that when they bought American cotton in the past, we impose tariffs on their pajamas and commodities. But now, when they plan to visit the United States in May to purchase cotton worth 500 million U.S. dollars, The United States suddenly imposed tariffs on Chinese Coated Paper.” He added: “Do you want to annoy your best clients again?”