China to impose tariffs on scrap imports from the US

China to impose tariffs on scrap imports from the US

Tariffs will go into effect Aug. 23.

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August 8, 2018
DeAnne Toto
Commodities Construction Demolition Legislation & Regulations Metals

Image: Dreamstime

In response to the U.S. Trade Representative’s (USTR’s) office publishing its final list of $16 billion in Chinese goods that will be subject to an additional tariff of 25 percent as of Aug. 23, China has announced its intentions to begin imposing an additional tariff of 25 percent on certain goods, including scrap, imported from the U.S. starting on that same date.

The Institute of Scrap Recycling Industries (ISRI), Washington, says the U.S. exported a total of $5.6 billion worth of scrap commodities to China in 2017. Through the first six months of 2018, the total of U.S. scrap exports to China was $2.2 billion, a decrease of 24 percent from the same time frame last year, the association adds. 

According to ISRI, the tariff codes affected by China’s retaliatory measures are:

  • 3915 Plastics; 
  • 4707 Paper; 
  • 7204 Ferrous; 
  • 7404 Copper; 
  • 7503 Nickel; 
  • 7602 Aluminum; 
  • 7802 Lead; 
  • 7902 Zinc; 
  • 8002 Tin; and
  • 8104 Other base metals.

“ISRI is already hearing from contacts in China that the announcement has caused consternation among Chinese consumers of U.S. scrap commodities,” the association says in a statement regarding China’s most recent round of tariffs. “Although these tariffs will not be levied on imports from other countries, it is our understanding that other regions may not be able to fulfill all of China's demand. This is in line with other reports that the trade war has had an impact on the Chinese economy across many sectors.

“ISRI regrets that the trade dispute between the United States and China continues to escalate without any indication that the two governments will be negotiating an agreement on trade,” the association continues. “There is no doubt that these tariffs will impair the already diminishing scrap exports from the United States to China.”

The most recent tariffs announced by the USTR were part of the U.S. response to what it claims are China’s unfair trade practices related to the forced transfer of American technology and intellectual property. This is the second round of tariffs the U.S. has introduced on goods from China. The first round of tariffs, which affected nearly $34 billion in Chinese goods under Section 301 of the Trade Act of 1974, went into effect July 6.

The list of Chinese goods to be taxed as of Aug. 23 from the USTR’s office contains 279 of the original 284 tariff lines that were on a proposed list announced June 15. Changes to the proposed list were made after USTR and the interagency Section 301 Committee sought and received written comments and testimony during a two-day public hearing last month.

In March 2018, USTR released the findings of its Section 301 investigation that found China’s acts, policies and practices related to technology transfer, intellectual property and innovation are unreasonable and discriminatory and burden U.S. commerce. According to the investigation, China uses joint venture requirements, foreign investment restrictions and administrative review and licensing processes to require or pressure technology transfer from U.S. companies. The country also deprives U.S. companies of the ability to set market-based terms in licensing and other technology-related negotiations and directs and unfairly facilitates the systematic investment in, and acquisition of, U.S. companies and assets to generate large-scale technology transfer, the USTR says. Additionally, China conducts and supports cyber intrusions into U.S. commercial computer networks to gain unauthorized access to commercially valuable business information.