Buying American Cotton Act of 2025

The Buying American Cotton Act of 2025 (S1919) was introduced by Senator Cindy Hyde-Smith (R-MS) on May 22, 2025, and referred to the Committee on Finance the same day. It has had zero legislative actions in the 11 months since. The bill would amend the Internal Revenue Code to create a new Section 45BB — a domestic cotton consumption credit equal to 24% of the applicable cotton market price multiplied by the documented volume of qualified cotton in eligible articles sold in qualifying sales. The credit is non-refundable and part of the general business credit under Section 38. The funding mechanism is a tax expenditure — it does not authorize direct spending or appropriate any dollars. The Joint Committee on Taxation has not released a revenue estimate, but any credit reduces federal tax receipts. Actual economic impact depends on future appropriations language that is not included in this bill. The credit applies only to the first sale to an unrelated person, and sourcing requirements mandate that cotton be US-origin with processing either entirely in the US or in FTA or unilateral preference program countries. Structural winners if this bill were to pass would be US cotton growers ($CTVA as a cotton seed supplier, though cotton-specific seed is a small portion of Corteva's portfolio) and domestic textile processors. Equipment manufacturers like and $AGCO could see incremental demand if the credit incentivizes acreage expansion. However, the US textile manufacturing base has shrunk dramatically — according to the National Council of Textile Organizations, US textile mill employment is below 100,000. The credit's structure primarily benefits the first domestic processor of US cotton. Downstream apparel and home goods manufacturers may benefit indirectly. No real market data was provided in the enrichment data. The legislative timeline is indeterminate — the bill is in the Senate Finance Committee with no hearings, no markups, and no companion bill action (HR7230 is also referred to Ways and Means). With 14 cosponsors from cotton-growing states (MS, AL, KS, AR, GA, TX, MO, TN, LA, NC, SC), the bill has geographic but not institutional momentum. Neither Senate Finance Chairman nor House Ways and Means Chairman are cosponsors.