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How China tariffs on US commodities, energy stand after Phase 1 trade deal

Before Sunday's deal, US corn, sorghum, wheat, undenatured ethanol and refined copper cathodes had faced an additional tariff of 10% on shipments to China.

December 24, 2019 / 04:11 PM IST

China and the United States have agreed terms of a Phase 1 trade deal under which the United States reduced some tariffs and Beijing cancelled retaliatory duties that were scheduled to take effect on December 15.

Before Sunday's deal, US corn, sorghum, wheat, undenatured ethanol and refined copper cathodes had faced an additional tariff of 10% on shipments to China. Propane, cotton, aluminium scrap, copper scrap and rare earth magnets were all set for an additional 5% duty.

Below is a list and timeline showing how China's tariffs on key US commodities and energy items stand after the Phase 1 accord.

CRUDE OIL

China imposed a 5% tariff on US crude oil shipments from Sept. 1, the first time US oil had been targeted since the trade war between the world's top two economies started more than a year ago. The 5% tariff was not affected by Sunday's deal.

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China, the world's biggest crude importer, has sharply lowered US shipments from a record high last year. Chinese customs data showed imports in the first 10 months were halved year-on-year to 146,275 barrels per day.

PROPANE

China removed an additional 5% tariff on US propane shipments which was set to take effect from Dec. 1. A 25% duty that China imposed on US propane on Aug. 23, 2018, remains in place.

Chinese firms process US propane into petrochemicals such as propylene. Imports last year were worth an estimated $2 billion.

LIQUEFIED NATURAL GAS (LNG)

China imposed a 10% punitive tariff on US LNG shipments in September 2018, raising it to 25% in June. LNG duties were not affected by Sunday's deal.

Imports of the super-chilled fuel in the first 10 months of 2019 shrank 87.2% on the year to 258,955 tonnes, according to Chinese customs.

METHANOL, ETHYLENE GLYCOL (MEG)

China imposed tariffs of 25% on US methanol and MEG in June this year. These were not affected by Sunday's deal.

SOYBEANS

No additional duty had been scheduled to come into effect on Dec. 15.

A 25% tariff on soybeans in July 2018 had halted all buying by commercial buyers, but Chinese crushers went back to the US market following a trade truce in December last year. An additional 5% duty came into effect in September. The Chinese government has given tariff exemptions to some US soybean imports.

China bought 11.3 million tonnes of soybeans from the United States in January-October, down 31.8% from last year. The United States has sold at least another 1.5 million tonnes of beans to Chinese crushers since early November

PORK

American pork faces total import duties of 72% after including the 12% "most-favoured nation" tariff. These duties were not changed in Sunday's deal, but China is expected to boost US meat imports. An outbreak of African swine fever in China has decimated the world's largest pig herd and sent domestic pork prices soaring to record levels.

Total import tariffs on US pork will go down to 68% in the new year, when tariff rate cut on frozen pork shipments takes effect.

SCRAP METAL

An additional duty of 5% on US aluminium scrap, which was to go into effect on Dec. 15, has been cancelled. The material was already affected by an initial 25% tariff in April 2018, following by another 25% increase in August 2018.

Shipments to China were down only 17.3% year-on-year in the first 10 months of 2019, but those of US scrap copper, subject to a 25% tariff since August 2018, crashed by 76.6% over the same period.

RARE EARTHS

China, which this year raised the prospect of restricting rare earth exports to the United States but has not announced any formal measures, removed the extra 5% tariff on imports of US permanent rare earth magnets from December as part of the Phase 1 deal. There has been a 25% tariff on US rare earth ore imports since June 2019.
Reuters
first published: Dec 24, 2019 04:05 pm

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