China has imposed an additional 15% tariff on ethanol imports from the United States, in response to new U.S. duties on Chinese aluminium and steel exports. The previous duty was 30%. The new tariffs will raise the price of U.S. ethanol to around CNY 6,300 (USD 1,003.03) per tonne.
The tariffs, which became effective yesterday, nullifies the cost savings from cheaper U.S. ethanol imports, which was welcomed by local producers.
“We have so much corn. We will do absolutely fine if we don’t import ethanol,” said a manager at a major ethanol producer in China.
China, however, will most probably need to resume imports to meet the government target of 10% ethanol content in all gasoline sold nationwide by 2020, which would mean an annual consumption of around 15 million tonnes of ethanol, according to Reuters.
Currently, China only produces 2.5 million tonnes of ethanol per year.