China releases tariff exemptions for a few U.S. petrochemical, oil products
China has unveiled a new list of import tariff exemptions for six petrochemical and a few oil products from the United States, days after the world’s two largest economies announced a Phase One trade agreement on 13 December. China also waived import tariffs for some soybeans and pork shipments from the United States on 6 December.
As part of the Phase One agreement, the U.S. suspended tariffs that were planned on USD160 billion in Chinese imports that were set to take effect on 15 December. The U.S. also halved the 1 September tariffs from 15% to 7.5%, which included all kinds of consumer products such as clothing and sports equipment.
Under the deal, China will purchase an unspecified amount of American products and has also agreed to “structural” changes, which have so far not been detailed.
The new list of import tariff exemptions will apply to four petrochemical products, such as metallocene high-density polyethylene (HDPE) and a special grade of linear low-density polyethylene (LLDPE), and refined oil products that include white oil and food-grade petroleum wax. The exemptions will be for one year from 26 December, China’s Finance Ministry said.
“The exemptions could see China resume buying more HDPE and LLDPE from the U.S., reversing the trade flow, as the U.S. supplies have been diverted to Latin America and Europe while China has been importing mostly from the Middle East,” Reuters quoted Kelly Cui, a principal analyst at Wood Mackenzie.
China is the world’s largest importer of polyethylene. In 2018, China imported 6.86 million tonnes of HDPE and 4.46 million tonnes of LLDPE, which have a combined total value of about USD14 billion.
For petroleum wax imports from the U.S., China imported 1,108 tonnes worth USD3.2 million in the first 10 months of 2019, one-tenth of China’s total imports of the product, according to Chinese customs data and consultancy JLC Network Technology, according to Reuters.
White oil imports from the U.S. were 3,490 tonnes with a value of USD8.7 million during the same period, representing 6% of China’s total imports of white oils.
Duties already imposed on U.S. products would not be refunded, the ministry said.
China said it will continue to work on the product exemptions and will release the second batch of waivers at an “appropriate time”.