China has committed to buying significant amounts of commodities such as crude, natural gas, coal and LPG from the US under the "phase one" trade deal that was signed in Washington yesterday.
The deal document lists a handful of energy products that will account for over a quarter of the $200bn of additional US exports that China has agreed to buy over the next two years (see table). Iron and steel, ethanol, petroleum coke, methanol and some fertilizer products are also included in the list.
The target for energy purchases has been set at $52.4bn, comprising $18.5bn of additional imports in the first year and $33.9bn in 2021. The figures use a baseline of 2017, when US energy exports to China were around $8bn, suggesting the total import targets are around $27bn in the first year, rising to $42bn in the second year.
US energy exports to China peaked at $6.4bn during January-June 2018 — an annualised rate of just under $13bn — before falling sharply as the trade war intensified, to $8.3bn for the full year.
China has also committed to buying another $77.7bn of US manufactured goods as part of the deal. This includes iron and steel products and some rare earths, although these are likely to make up a small proportion of the target.
Ethanol is included in the $32bn of extra US agricultural goods that China will buy, the trade document shows.
All of the products listed are subject to Chinese import tariffs, which range from 5pc for crude to 25pc for many other products. The deal does not include any commitment by Beijing to lower or remove its tariffs.
The agreement notes that purchases will be made at market prices based on commercial considerations and market conditions.
By Kevin Foster
| Increases in US exports to China under the phase-one trade deal | |
| Category | HS code |
| Energy | |
| LNG | 271111 |
| Crude oil | 2709 |
| Propane | 271112 |
| Butane | 271113 |
| Other LPG/gases | 27111990 |
| Uncalcined petroleum coke | 271311 |
| Calcined petroleum coke | 271312 |
| Naphtha | 271012250 |
| Methanol | 290511 |
| Coal | 2701 |
| Manufactured goods* | |
| Iron and steel | 7201-7307 |
| Rare earth metals, scandium and yttrium | 2805 |
| Sulphuric acid | 2807 |
| Ammonia | 2814 |
| DCP/MCP | 2835 |
| MCP | 283526 |
| Phosphoric acid | 2809 |
| *Selected items | |
| Ethanol is not listed in the annex. A footnote specifies it is included under 'Other agricultural commodities' | |
| Source: Economic and Trade Agreement between the US and China, Phase One, Annex 6.1 |
