How Much Impact will the Trade War Have on China's TDI Imports and Exports?
2018-10-11    [Source:PUdaily]
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PUdaily, Shanghai-- The trade war between China and the United States, the world's two largest economies, started on July 6. Later, the war escalated.

On July 11, 2018, the U.S. government announced that it decided to impose an additional tariff of 10% on $200 billion worth of Chinese goods. On August 2, it raised the tariff to 25%. On September 18, the U.S. government announced that it planned to levy an additional tariff of 10% on $200 billion worth of Chinese goods, which would take effect on September 24. On January 1, the tariff will be increased to 25%.

On September 18, according to the Announcement of the Customs tariff Commission of the State Council on imposing additional tariffs on American goods (the second batch), the Chinese government announced that on September 24, 2018 at 12:01, it would impose a 10% additional tariff on 2,493 items listed in Appendix 1 and 1,078 items listed in Appendix 2, as well as 5% on 974 items listed in Appendix 3 and 662 items listed in Appendix 4.

Figure 1 China’s list of tariffs on American goods



Figure 2 America’s list of tariffs on Chinese goods



As shown in Figure 1 and Figure 2, TDI, which is under the Tariff No. 29291010, is on the two countries’ lists of tariffs. Next, PUdaily will analyze the impact of the additional tariffs on China’s TDI imports and exports.

Imports

According to PUdaily, in 2017 China had 11 import sources of TDI, with import volume totalling 42,800 tons. The main sources are South Korea and Japan, from which China imported about 28,600 tons and 8,200 tons of TDI, respectively. The two countries combined accounted for 86% of China’s total imports. By contrast, China imported 33 tons of TDI from the United States, accounting for only 0.08% of China’s total imports. Obviously, the share is negligible.


As a result, China’s additional tariff on America-derived TDI has limited impact on China’s TDI imports.

Table China's TDI imports from South Korea and Japan (in tons)

Country

South Korea

Japan

Import volume

28,611

8,220


In 2017, China exported 124,100 tons of TDI to 77 countries. The United States was the biggest export destination, to which about 13,000 tons of TDI were exported, accounting for 10.6% of China’s total exports.

As for the specific exporters, according to PUdaily, in 2017 Covestro was the only supplier to America. It exported 13,000 tons of TDI to the United States, accounting for 13.2% of its total TDI exports. It can be seen that America holds an important position among China’s export destinations. Therefore, the additional tariff imposed by the United States will have certain impact on China’s TDI exports.

Table 2 volume of China's TDI exports to different countries/regions (in tons)

Country

U.S.

Germany

Taiwan (China)

India

Export volume

13,128

10,554

9,509

9,169


Overall, as the United States accounts for a negligible share of China’s TDI imports, China’s 10% additional tariff will have little impact on its TDI imports in the short term. As America makes up significant share of China’s total TDI exports, the additional tariff imposed by it will have certain impact on China’s TDI exports.

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