US considers 25% import tariff on Chinese minerals

By Davide Ghilotti
Published: Thursday, 06 September 2018

Many major minerals could be affected if the US goes ahead with a plan to raise the import tariff on China-origin materials as the trade war between the two countries gathers pace.

The government of the United States is considering an increase to 25% for the proposed import tariffs on a range of Chinese mineral commodities, up from the original proposal of a 10% rate.

There will be a consultation period before new, higher tariffs are imposed. The US government has extended its previous deadline for submission of comments from August 30 to September 5.

The list, originally released on July 10, included goods worth some $200 billion.

The move signals an escalation in the trade war between the countries, while China holds firm on tariffs on US agricultural exports, which in themselves are in retaliation for an earlier round of US-imposed duties on Chinese-made steel and other materials.

The tightly controlled Chinese currency has also been depreciating against the dollar, a move which makes Chinese exports more competitive in the US.

The commodities that would be affected by the higher import duty rate include most minerals used in refractories, pigments, oilfield applications, batteries, ceramics and chemicals.

In refractories, minerals on the list include graphite, magnesia, alumina and silicon carbide as well as finished refractory products such as various types of bricks, cements and mixes.

China produces more than half the world’s refractory materials, which are a key input for the steel industry.

For oilfield minerals, the list includes barite and bentonite.

One Indian barite exporter said that he had not seen any increase in interest, despite the fact that China is the main rival to India in shipping barite to the US.

"We haven’t altered our plans [because] it’s very hard to know what’s going to happen. [US President Donald Trump] says one thing, but then it changes," he said. "We will see."

Pigments such as titanium dioxide, titanium feedstocks and iron oxide pigment would also be affected.

Fluorspar and fluorochemicals are on the list, but the US does not import significant volumes of either product from China.

Rare earths would also be hit by the proposed tariffs; China is by far the world’s top producer of rare earths.

In addition to the rare earth metals and their oxides, the tariff list also includes permanent magnets, which would include magnets made from the rare earths neodymium and praseodymium. These magnets are used in electric motors for electric vehicles.

Other minerals listed include antimony, lithium carbonate and oxide, talc, kaolin, vermiculite, silica and quartz with various specifications, mica, chamotte, sulfur, andalusite, kyanite, sillimanite and dolomite.