While tense trade negotiations between the US and Mexico over the price and quota for U. S. imports of Mexican sugar continue (a happy ending appears unlikely, especially after a Mexican sugar company on Friday called on the government to take action against American fructose producers and protect the local industry from US deals), a new protectionist measure involving sugar half way around the globe was unveiled on Monday when China – the world’s biggest importer of the sweet substance – said it will impose significant penalties on sugar imports following lobbying by domestic mills.
According to the ruling first described by Reuters, up to a third of China’s annual sugar imports will be impacted by an extra tariff for the next three years on shipments that the government said had “seriously damaged” the domestic industry.
The details: China currently allows just over 1.9 million tonnes of imports at a tariff of 15% as part of its commitment to the World Trade Organization. All imports above this amount are slapped with a 50% levy. After Monday’s ruling, the total sugar duty will nearly double, with Beijing imposing an additional 45% tax to these imports in the current fiscal year taking the total to 95%. This will fall to 90% next year and 85% a year later, China’s Commerce Ministry said in a statement. The ruling exempted 190 smaller countries and regions from the new duty, including smaller producers such as the Philippines, Pakistan and Myanmar.
This post was published at Zero Hedge on May 22, 2017.