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China adds to US ethanol tariffs: Update

02 Apr 2018 20:39 (+01:00 GMT)
China adds to US ethanol tariffs: Update

Adds RFA comment.

Houston, 2 April (Argus) — China will add 15pc tariffs to US ethanol imports already heavily taxed by that government as the country's trade disputes with President Donald Trump's administration escalate.

The Chinese Ministry of Commerce late yesterday expanded tariffs on US ethanol and 127 other mostly agricultural goods. The order imposed a 45pc tariff on imports of US ethanol, up from 30pc.

The country cited US tariffs on Chinese steel and aluminum that "seriously infringed the interests" of Chinese trade.

"It is hoped that the United states will withdraw the measures that violate the rules of the (World Trade Organization) as soon as possible, so that the trade of related products between China and the United States will return to normal," the ministry said in a statement.

Brazil remained the destination of choice for most US ethanol exports, averaging more than 29,000 b/d in 2017, according to US Census trade data. Canada also imported far more US ethanol than China, averaging roughly 21,500 b/d last year.

But China offered the most attractive growth market. The country planned to adopt 10pc ethanol blends of gasoline by 2020, a volume of consumption far outstripping domestic supply that averaged 2.8mn b/d in 2016. US producers that year sent an average 13,000 b/d.

US ethanol exports to China tumbled last year after the country added a 30pc tariff in January, to just 2,000 b/d.

All of that volume moved in November and December, according to federal data. December shipments averaged 17,000 b/d.

Low US ethanol prices had restored shipments in spite of the 30pc tariff, trade group Renewable Fuels Association said today.

"The imposition of this new, additional tariff will likely again preclude sales to the country," chief executive Bob Dinneen said.

US ethanol exporters still face challenges in their largest markets. Brazil has considered eliminating an exemption for the first 2,600 b/d of imports each quarter from a 20pc tariff in its own response to US trade policy.