Does the Treasury allow tariff exclusion to apply for exemption from coking coal

On May 13, China's Ministry of Finance issued a public announcement, deciding to exempt some goods imported from the United States from tariffs, including coking coal imported from the United States. Since last year, Sino-US trade relations have been tense, and China has imposed import tariffs on some U.S. goods transported to China.

According to the announcement of the Ministry of Finance on the Trial Measures for the Exclusion of Tariff Commodities imposed on the United States and Canada, the first batch of excludable commodities, including coal, has been accepted since June 3, 2019 with the deadline of July 5, 2019. The second batch of excludable goods will be accepted from September 2, 2019, with the deadline of October 18, 2019.

The bulletin states that applications should be justified by facts and data, including difficulties in finding alternative sources of commodities, serious economic damage to the applicant, and significant negative structural effects (including impacts on industry development, technological progress, employment, environmental protection) or serious social consequences.

On August 7, 2018, the United States announced a 25% tariff on Chinese imports to the United States, which came into effect on August 23. Two days later, the Chinese government said it would impose a 25% tariff on US $16 billion worth of goods exported to China on August 23. China previously imposed a 3% tariff on American coking coal.

S&P quoted a U.S. coal company as saying that it was unlikely that U.S. coking coal tariffs would be exempted because Chinese users could find alternatives to U.S. coal from Mongolia, Australia, Russia and the domestic market. However, this will ensure that Chinese end users with coal blending needs have more choices. Market participants said that there are about five ships of Buchanan coal in China bonded warehouse. The specifications of these coking coal are CSR 40%, volatile 18-19%, moisture 7%, ash 5-6%. According to market news, Buchanan coal is usually transported by a small headland ship with a load of 130,000 tons. A user who used Buchanan Coal in the United States indicated that Chinese end users were unlikely to buy American coal and apply for tariff exemption.

"I don't think users will apply for the exclusion of coking coal tariffs, because there are a large number of alternative coal available in the domestic market." This user representation. In April, market news said that American miners were actively selling coking coal to China and that China might exempt Imported Coking Coal from the United States from tariffs. In March, China imported a lot of oil and soybeans from the United States. On May 5, however, President Trump imposed a 25% tariff on imports from China.

China Customs data show that in the first quarter of 2019, China imported 606,000 tons of coking coal from the United States, a 45% drop over the same period last year. In 2018, China imported 2.1 million tons of coking coal from the United States, down 33% from a year earlier. However, American coking coal accounts for only a small part of China's coking coal imports. Australia and Mongolia are the main suppliers of coking coal in China, accounting for 88% of China's coking coal imports in 2018.