China's metal imports from US replaceable; machinery may require tariff exemptions: traders

  • 03-Jun-2019
  • China's metal imports from US replaceable; machinery may require tariff exemptions: traders

Chinese metal companies are unlikely to seek tariff exemptions for the import of metal concentrates and cathodes from the US, but may seek exemption for the import of machinery that are not replaceable, market sources told S&P Global Platts Monday.

China's Ministry of Finance said last week that it will start accepting the first batch of applications for exemption to the 5%-25% tariff imposed on $60 billion worth of imports from the US on Monday
Effective June 1, a 25% import tariff is levied on 2,493 categories of goods, a 20% tariff on 1,078 goods, a 10% tariff on 974 goods, and a 5% tariff on 595 goods -- including copper and molybdenum concentrate and products from the US, the ministry said.

The applications for exemptions will be accepted over June 3-July 5, and the second batch over September 2-October 18, the ministry notice said.

Traders in China and Japan said Chinese metal importers have already made a switch to non-US products like moly and copper concentrates, and would not need to seek exemptions.

"Chinese moly roasters import concentrate from South America, no need to apply," one Chinese trader said. Some Chinese companies with processing plants and upstream manufacturing facilities may seek exemptions for import of machinery from the US as they are not easily replaceable, one trader said.

In the US, aluminum products manufacturer Arconic has applied for exclusion to the US tariff on imports from China, according to records of the US Federal Register.

In September last year, Arconic had applied for tariff exclusion for machineries under customs code 8417 and 8514 among others, which are currently being reviewed by the US government.

The US, while imposing tariff on imports from China under Section 301 of the Trade Expansion Act, has excluded from July 6, 2018, some machinery imported from China from duty, according to the website of the US Federal Register.

The first list of 30 categories of Chinese goods that were exempted from the US tariff include thermostat for air conditioners, radiation therapy system made of steel, and papermaking machinery made of stainless steel.

The exclusion is effective for one year.

To-date, more than 10,000 tariff exclusion requests have been submitted to the US government.

Tariff exclusion for fork lifts imported into the US from China by US-based electric commercial vehicle maker BYD Motor, was granted in October last year, while a request by automaker Tesla for a tariff exemption on imports of navigational instruments from China was rejected in November last year, the Federal Register records showed.

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