Core Insights - Cotton prices have remained stable and low despite trade volatility, with a minor fluctuation of three to four cents per pound since January, marking the lowest prices in the past five to six years [2][3] - The stability in cotton pricing is attributed to supply and demand dynamics, with current prices significantly lower than the $1.50 per pound peak during the Covid-era stimulus [3] Industry Overview - Cotton is the second most traded agricultural product globally, with 85 percent of U.S.-grown cotton being exported [4] - U.S. cotton prices are influenced by global production trends, with China importing a decade-high of 15 million bales in the 2023-24 crop year, creating a pricing bump due to government reserve gathering [5] - Brazil's cotton production has doubled over the last decade, increasing competition for U.S. cotton, which is the fourth largest producer [6] Trade Policies and Implications - U.S. cotton growers face exposure to trade turbulence, but new policies aim to increase the use of American-made inputs in U.S.-destined goods [7] - The "Liberation Day" tariff announcement allows products with at least 20 percent U.S. content to avoid tariffs on that portion, incentivizing companies to use U.S. cotton if the proposed Buying American Cotton Act is passed [7]