China exempts more US goods from tariffs

O New list covers chemical and oil products, in effect for one year from Dec 26

SINGAPORE/BEIJING: China yesterday unveiled a new list of import tariff exemptions for six chemical and oil products from the United States, days after the world’s two largest economies announced a Phase 1 trade deal.

The exemptions will be for one year from Dec 26, the Finance Ministry said, without providing a value for the imports excluded from duties.

Duties already imposed on US products would not be refunded, the ministry added.

The tariff waivers will apply to four chemical 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.

Kelly Cui, principal analyst with consultancy

Wood Mackenzie, said the exemptions on the chemical products would benefit companies such as Dow Chemical Co, ExxonMobil Corp and Chevron Phillips Chemical Co, which have since 2017 been adding shale-based ethylene production facilities and targeting China as the prime export market.

Cui also pointed out that the listed products, metallocene HDPE and LLDPE, were high-end special grade plastic raw materials used for packaging and pipes. China is the world’s largest importer of polyethylene.

“The exemptions could see China resume buying more HDPE and LLDPE from the US, reversing the trade flow, as the US supplies have been diverted to Latin America and Europe while China has been importing mostly from the Middle East,” said Cui.

China waived import tariffs for some soybeans and pork shipments from the US on Dec 6, before the two sides reached a Phase 1 trade deal to cancel tariffs that were planned to take effect on Dec 15.

China said it will continue to work on the product exemptions and release the second batch of waivers at an appropriate time.

In another development, Gao Feng, a spokesman at the commerce ministry, said China and the US are in touch over the signing of their Phase 1 trade deal, which will see lower US tariffs on Chinese goods and higher Chinese purchases of US farm, energy and manufactured goods.

Both the Chinese and US trade teams are in close communication, he told reporters at a regular briefing, adding there is no specific information on the deal to disclose currently.

“After the official signing of the deal, the content of the agreement will be made public,“Gao said. – Reuters