BEIJING/SINGAPORE: China and the US have agreed on the terms of a “phase one” trade deal under which Washington reduced some tariffs and Beijing cancelled retaliatory duties that were previously scheduled to take effect on Dec 15.
Before Sunday’s deal, US corn, sorghum, wheat, undenatured ethanol, and refined copper cathodes had faced an additional tariff of 10% on imports into China. Propane, cotton, aluminium scrap, copper scrap and rare earth magnets were all set for an additional 5% duty.
Here is a list and timeline showing how China’s tariffs on key US commodities and energy items stand after the “phase one” accord.
Crude oil: Beijing 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.
China, the world’s biggest crude importer, has sharply lowered US shipments from a record high hit 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 Beijing 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 US$2 bil (RM8.28 bil).
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 leaders in the two countries agreed 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 US in January-October, down 31.8% from last year. The US 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 Beijing is expected to boost US meat imports into China, where a severe African swine fever disease has decimated the world’s largest pig herd and sent domestic pork prices soaring to record levels.
Scrap metal: An additional duty of 5% on US aluminum 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% hike 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: Beijing, which this year raised the prospect of restricting rare earth exports to the US 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-one deal. There has been a 25% tariff on US rare earth ore imports since June 2019. – Reuters
