China is preparing to halve the extra tariffs on U.S goods that went into effect last September, including on crude oil, soybeans, pork and beef.

The reductions, due to come into force at 1:01 p.m. local time (0501 GMT) on Feb. 14, are the first round of tariff cuts by China since the two countries signed a Phase 1 trade deal on Jan 15.

The halving applies only to the additional tariffs imposed by Beijing in September, and not to the total duties on goods built up since 2018 during the trade war.

It will see total tariffs on soybeans fall to 27.5% from 30%, total duties on pork drop to 55% from 60% and those on beef do down to 30% from 35%. Tariffs for U.S. crude oil, which was first targeted in September, will be reduced to 2.5% from 5%.

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

CRUDE OIL

China, the world’s biggest crude importer, has cut U.S. shipments from a record high in 2018. Chinese imports from the United States were nearly halved in 2019 to 6.35 million tonnes, with no imports in December.

PROPANE

Chinese firms process U.S. propane into petrochemicals such as propylene. Imports from the United States fell to 2,443 tonnes last year, from 1.5 million tonnes in 2018.

Beijing has already scrapped an additional 5% tariff on U.S. propane shipments that was set to take effect from Dec. 1, 2019.

LIQUEFIED NATURAL GAS (LNG)

Imports of the super-chilled fuel from the United States stood at 258,955 tonnes in 2019, far lower than the 2.15 million tonnes imported in 2018, according to Chinese customs. This is, however, a fraction of China’s total LNG imports in 2019 of 60.25 million tonnes.

METHANOL, ETHYLENE GLYCOL (MEG)

Imports of U.S. methanol in 2019 dropped to 113 tonnes, compared with 75,118 tonnes in 2018. China imported only 84,610 tonnes of U.S. MEG last year, compared with 147,890 tonnes in 2018.

These were also a tiny part of China’s total 2019 methanol imports at 9.95 million tonnes and MEG imports of 9.03 million tonnes.

SOYBEANS

The Chinese government has given tariff exemptions to some U.S. soybean imports. In 2019, China brought in 16.94 million tonnes of U.S. soybeans, edging up from 16.6 million tonnes in 2018, when shipments nearly halved from the previous year due to the trade dispute. The Chinese government has given tariff exemptions to some U.S. soybean imports.

PORK

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. U.S. pork exports to China and Hong Kong were up 49% year-on-year in value at $1.18 billion from January to November 2019.

SCRAP METAL

Shipments of U.S. aluminum scrap to China were down only 19.7% year-on-year in the first 11 months of 2019, but those of U.S. scrap copper, subject to a 25% tariff since August 2018, crashed by 75.7% over the same period.

RARE EARTHS

China has raised the prospect of restricting rare earth exports to the United States but has not announced any formal curbs or export duties.

In the other direction, it has levied tariffs on imports of U.S. rare earth ore and rare earth magnets since June 2019. It agreed as part of the Phase 1 trade deal to buy more of two rare-earth metals - scandium and yttrium - from the United States.

Source: Reuters
 

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