China announces new tariff exemptions for US chemical, oil products
US China Trade
Chinaon Thursday unveiled anewlist of importtariffexemptionsfor sixchemicalandoilproductsfrom the United States, days after the world's two largest economies announced a Phase Onetrade deal.
Theexemptionswill be for one year from December26, the Finance Ministry said, without providing a value for the imports excluded from duties.
Duties already imposed onUSproductswould not be refunded, the ministry added.
Thetariffwaivers will apply to fourchemicalproducts, such as metallocene high-density polyethylene (HDPE) and a special grade of linear low-density polyethylene (LLDPE), and refinedoilproductsthat include whiteoiland food-grade petroleum wax.
Kelly Cui, principal analyst with consultancy Wood Mackenzie, said theexemptionson thechemicalproductswould benefit companies such as DowChemicalCo, Exxon Mobil Corp and Chevron PhillipsChemicalCo, which have since 2017 been adding shale-based ethylene production facilities and targetingChinaas the prime export market.
Cui also pointed out that the listedproducts, metallocene HDPE and LLDPE, were high-end special grade plastic raw materials used for packaging and pipes.Chinais the world's largest importer of polyethylene.
"Theexemptionscould seeChinaresume buying more HDPE and LLDPE from theUS, reversing the trade flow, as theUSsupplies have been diverted to Latin America and Europe whileChinahas been importing mostly from the Middle East," said Cui.
In 2018,Chinaimported some 6.86 million tonnes of HDPE and 4.46 million tonnes of LLDPE, according to Cui, who cited Chinese customs data. The data does not provide a breakdown for different grades of each polymer.
These imports had a combined total value of about $14 billionbased on the delivered cost for these twoproducts.
For petroleum wax,Chinaimported from theUS1,108 tonnes or worth only $3.2 million in the first 10 months of 2019, one-tenth ofChina's total imports of the product, according to Chinese customs data and consultancy JLC Network Technology.
Whiteoilimports from theUSwere 3,490 tonnes or worth only $8.7 million during the same period, roughly 6 per centofChina's total imports.
Chinawaived importtariffs for some soybeans and pork shipments from the United States on December6, before the two sides reached a Phase Onetrade deal to canceltariffs that were planned to take effect on December15.
Chinasaid it will continue to work on the productexemptionsand release the second batch of waivers at an appropriate time.
The Sino-UStrade war has been a major headache for global policymakers as it slowed economic growth worldwide and chilled business investment and confidence.
USTrade Representative Robert Lighthizer last week acknowledged there remained hard work ahead in the next phase of negotiations.
He gave no specific timetable, but saidU.S. President Donald Trump did not want to wait until after the 2020 presidential election to wrap up a more comprehensive agreement.