On Thursday, China revealed the latest list of import exemptions of tariffs for six oil and chemical products from the U.S., days after the two largest economies of the world announced “phase one” trade deal. The Finance Ministry said that the exemptions would be for one year from December 26 without giving a value for the imports excluded from tariffs. The ministry added, tariffs already imposed on the products of the United States would refund.
The duties waivers will impose on four chemical products, like a special grade of linear low-density polyethylene (LLDPE), metallocene high-density polyethylene (HDPE), and refined oil products such as white oil & food-grade petroleum wax. A principal analyst with consultancy Wood Mackenzie, Kelly Cui said the immunities on the chemical products might benefit firms such as Chevron Philips Chemical, Dow Chemical and Exxon Mobil, which have adding since 2017 been adding shale-based facilities of ethylene production and targeting Beijing as the primary export market.
Also, Cui mentioned that the listed products, metallocene LLDPE and HDPE, were high-end special grade raw materials of plastic used for pipes and packaging. China is the major importer of polyethylene in the world. Cui said that the exemptions might see China restart obtaining more LLDPE and HDPE from the United States, reversing the flow of trade, as the supplies of the United States diverted to Europe and Latin America while Beijing has to import mainly from the Middle East.
Total figures of Chinese imports of HDPE and LLDPE in 2018
According to Cui, China imported around 6.86 million tons of HDPE and about 4.46 million tons of LLDPE. Cui cited Chinese customs data for this statistic. The figures don’t give a collapse for different grades of each polymer. According to the calculations of Reuters, the combined overall value of these imports is around $14 billion. For petroleum wax, Beijing imported from the United States 1108 tons or worth only around $3.2 million in the first ten months of 2019, one-tenth of overall imports of China of the product, according to customs data & consultancy JLC Network Technology of China.
Imports of white oil from the United States were around 3490 metric tons or worth about $8.7 million during the same duration, approximately six percent of the total imports of China. China waived tariffs of imports for some pork and soybeans shipment from the U.S. on December 6, before the two countries reached a phase one trade deal to reverse duties that planned to take effect on December 15. China announced that it would continue to work on the exemptions of the product and release the 2nd phase of waivers at a proper time.
The Sino-United States trade war has the main pain for international legislators as it decelerated economic growth globally and chilled business & investment. Last week, Robert Lighthizer, the Trade Representative of the United States, accepted that still need a hard work ahead in the negotiations of the next phase. He didn’t specify any timetable but said the President of the United States, Donald Trump didn’t want to wait up until the U.S. 2020 presidential election to made a more comprehensive deal.