25% tariff expected for US recovered paper in China, starting Aug. 23

US recovered paper (RCP) imports in China now face a potential 25% tariff effective Aug. 23, if the government in China approves $60 billion in duties on 5,200 US products.

The tariffs would be levied if President Trump moves ahead with $200 billion in US duties on Chinese products. Sources said mills in China will drop the purchasing price to cover the tariff, noting that even with the 25% duty, RCP prices will still be cheaper than those in China. China’s revised import duty bill includes the tariff on RCP HS codes 47071000, 47072000, 4707300.

China has imported less than half RCP for the first half of this year, compared with the same period in 2017, with PPI Asiareporting Aug. 7 that inbound RCP tonnage in China was 7.1 million, a far cry from the 14.867 million tonnes registered in 2017.

By the end of June, China’s Ministry of Ecology and Environment (MEE) had approved licenses for tonnage totaling 10.844 million tonnes, according to PPI Asia.

In addition, MEE issued a new batch of RCP import permits amounting to 588,671 tonnes. The 17th batch of licenses was released on Aug. 3, taking the total tonnage that the MEE has approved for 2018 to 14.039 million tonnes, PPI Asia reported.

A contact said with major mills in China having so many import permits on-hand, they would need to use them or lose them, saying, Chinese mills “only have two-and-a-half months to ship; the import permit is very valuable and worth a lot of money, no one will waste their permit without using them.”

The contact added that a new balance will be established within a week among the China domestic price, Europe, and US price.

This notice comes after the announcement in the Aug. 3 Pulp & Paper Week that the tariffs list issued by China last week includes a 5% duty on US market pulp, which amounts to about $40-45/tonne, a contact said on Aug. 3.