China Unveils Tariff Adjustments for Next Year to Boost Foreign Trade
Import tariffs on some alternative meals and products will be removed next month, China’s finance ministry said. Meanwhile, the hefty tariffs on U.S. cargoes including soybeans remain in place.
China announced on Monday adjustments to some import and export tariffs for 2019, removing import duties on alternatives to soymeal for animal feeds and tariffs on fertilisers and iron ore exports, to boost foreign trade as the economy slows.
Import tariffs on so-called alternative meals, including rapeseed meal, cotton meal, sunflower meal and palm meal, will be removed from Jan. 1, 2019, along with those for the materials of some pharmaceutical goods, the finance ministry said in a statement on its website.
China will levy temporary tariffs on more than 700 items next year and maintain relatively low import tariffs for aircraft engines, the ministry added.
Temporary tax rates for manganese slag and lithium-ion battery cells for new energy vehicles will be removed and most-favoured-nation tax rates will be imposed on those products, according to the ministry.
For exports, China will not levy any export tariffs on 94 products next year including fertilisers, iron ore, slag, coal tar and wood pulp.
It will also further cut most-favoured-nation tariffs on 298 information technology products from July 2019. The statement did not give details.
China's economic growth slowed to 6.5 percent in the third quarter, the weakest pace since the global financial crisis and is expected to slow further next year amid a trade war with the United States.
A key item in the trade tussle is U.S. soybean exports. China imposed a 25 percent tariffs on soybeans in July in response to U.S. tariffs on Chinese goods causing a sharp drop in imports. Soybeans are key material for animal feed for China's vast livestock herds.
Zero U.S. Soybeans in November
The U.S. has been the second-largest soybean supplier to China with that component of the trade between the countries worth $12 billion in 2017.
However, in November, China's soybean imports from the United States plunged to zero, marking the first time since the trade war started that the world's largest soybean buyer has imported no U.S. supplies.
Instead, China has leaned on Brazilian imports to replace the U.S. cargoes, customs data showed on Monday.
China brought in 5.07 million tons of soybeans from Brazil in November, up more than 80 percent from 2.76 million tons a year ago, data from the General Administration of Customs showed.
Meanwhile, U.S. imports plunged from 4.7 million tons in November 2017 and were down from 67,000 tons in October.
China, the world's top soybean buyer, usually gets most of its oilseed imports from the United States in last quarter of the year as the U.S. harvest comes to market.
But, purchases have plunged since Beijing placed an additional 25 percent tariff on U.S. imports on July 6, in response to tariffs enacted by the U.S. on Chinese goods. The country has stepped up its Brazilian purchases to fill the gap.
Beijing resumed buying U.S. cargoes earlier this month, after the two countries agreed on Dec. 1 to a truce in their trade war. But, the hefty tariffs on U.S. cargoes remain in place.
China crushes soybeans for animal feed ingredient soymeal for its massive livestock herds.
The country has managed to maintain high soybean inventories even as buyers shunned U.S. cargoes through the Brazilian shipments, and as African swine fever has decimated pig herds, sapping demand for animal feed.
However, Brazilian crops are now in the middle of their growing cycle meaning less is available for export.