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China drops VAT on U.S. distillers grains
China has dropped its 11 percent value-added tax on imported U.S. dried distillers grains. U.S. Grains Council CEO Tom Sleight tells Brownfield Ag News the move by China comes as a result of President Trump’s Asia trip.
“We still have other tariff issues in China on U.S. DDGs coming from anti-dumping and countervailing duty tariff,” said Sleight, “but at least we’ve removed one obstacle, that being the value-added tax; it makes us a bit more competitive than we were yesterday.”
China reduced U.S. DDG imports, the price dropped, and other countries began buying more, said Sleight.
“It’s not an immediate slam-dunk that we’ll be sending boat loads and boat loads of DDGs to China because other markets have stepped in,” said Sleight, “which is great.”
Remaining anti-dumping and countervailing duties on U.S. DDGs are as high as nearly 54 percent. Those duties, combined with the value-added tax, resulted in a drop in U.S. DDG exports to China from 5.4 million metric tons in 2015, to less than 750,000 metric tons so far in 2017.
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