WASHING TON: China’s proposed 45% tariff on US ethanol imports would block an estimated 20 million gal/month of shipments, deal a blow to US producers’ export ambitions and make China’s own E10 target unreachable, according to S&P Global Platts Analytics.China proposed early Friday adding an additional 15% tariff in retaliation to US President Donald Trump’s trade action Thursday targeting China’s technology and manufacturing industries. The proposed hike was part of a wider statement by China’s Ministry of Commerce listing 128 commodities representing $3 billion in trade that could be subject to duties.
“I think that would probably cut us off most of the time,” Bruce Pickover, Platts Analytics’ senior director for global biofuels, said of US ethanol exports to China.
While US ethanol producers defend their 15 billion gal/year domestic mandate, they are looking to exports for growth, said Neelesh Nerurkar, a biofuels analyst for ClearView Energy Partners.
“They have been looking to overcome or reverse barriers that some of their largest markets adopted in 2017,” he said. “This is not the direction they were looking for things to go.”
And on China’s side, the tariff hike would likely make it impossible to meet its own ambitious target to blend 10% ethanol into nationwide gasoline supplies by 2020, Pickover said. China currently blends about 2-2.5%.
