China hikes import duty on US undenatured ethanol by 25% to 65%

Source: By Christina Siantar, Platts • Posted: Tuesday, August 7, 2018

Singapore — China’s Ministry of Commerce announced a 25% duty hike on US-origin undenatured ethanol last Friday, in retaliation to US increasing import tariffs from 10% to 25% on around $200 billion worth of Chinese goods on August 1.

 The higher import duties on undenatured ethanol, which already had a 40% tax, was part of a wider retaliation which included around 5,207 items from the US, that were subject to increased import duties ranging from 5% to 25%, the ministry said.

Beijing has yet to announce when the new tariffs will become effective.

On July 6, Beijing increased the import duty on US-origin denatured ethanol to 70% from 45%.

Import duties at 70% for denatured ethanol and 65% for undenatured ethanol will keep the arbitrage window closed for the remainder of the year for both types of ethanol from the US to China, trade sources said.

US is the largest supplier of ethanol to China, accounting for 85.8% of 494,823 cu m imported in the first quarter.