US Dollar Exchange Rates of
25th August
2019
China Yuan 7.1513
Report from China
China to levy tariffs on US wood products
China will impose additional tariffs on around US$75
billion worth of US goods. The Customs Tariff
Commission of the State Council said extra tariffs of either
5% or 10% will be applied depending on the product
imported from the United States.
The extra tariffs will be implemented in stages, some on 1
September and others 15 December 2019.
From 1 September 2019, China will impose 10%
additional tariffs on wood products including fuelwood,
softwood chips/pellets, sawnwood, plywood, wood and
bamboo tableware and kitchen utensils. From 15
December 2019 China will levy further tariffs on logs,
sawnwood, veneer, fibreboard, wooden wares, flooring,
bedroom redwood furniture, bamboo and rattan furniture,
plywood, particleboard, and natural cork products.
See:
http://gss.mof.gov.cn/zhengwuxinxi/zhengcefabu/201908/t20190
823_3372928.html
and
http://www.chinadaily.com.cn/cndy/2019-
08/24/content_37505279.htm
Some furniture removed from US tariff list
After announcing the postponement of extra tariffs on
Chinese products on 13 August 2019 the office of the
United States Trade Representative (USTR) made a
second round of adjustment of tariffs removing Chinese
made wooden furniture, plastic furniture, metal frame
chairs, routers, modems, prams, cradles, cots and some
other goods.
However, analysts in China report that furniture parts are
still on the list. In addition, not all Children¡¯s furniture will
be exempt as it seems children's high chairs will attract
tariffs from 1 September 2019.
According to the Xinhua News Agency, China's furniture
exports accounted for around 25% of the global market
share. As a result of the increased tariffs in the US several
large retailers in the US increased sales prices. According
to US Department of Labour data the US national furniture
price index (urban residents) increased 3.9% year-on-year
in July 2019, the third consecutive monthly rise. The
Children¡¯s furniture price index surged almost 12% yearon-
year.
VAT rates adjusted to help manufacturers
As of 1 April 2019 the VAT which was 16% for taxable
sales or imports was reduced to 13%. Also VAT taxpayers
who were subject to a 10% VAT rate saw a reduction to
9% and this has impacted timber companies.
Analysts report that, for example, a wood processing mill
in Jiangmen City, Guangdong Province had sales of
RMB35 million in 2018 and the total value of timber raw
materials was nearly RMB20 million. Based on the new
tax schedule the tax payable is expected to be reduced by
RMB240,000.
Timber imports through Manzhouli Port are likely to
decline
Russian log and sawnwood enters China mainly through
Manzhouli Port. This year, due to Russian restrictions on
log exports, China¡¯s imports have declined. On the other
hand imports of sawnwood increased slightly.
The decline was first observer in the second quarter of
2019. Analysts say that much of the decline can be
explained by the high stock levels in China. In recent
years, due to the slowdown of domestic consumption and
the decline of spending on infrastructure wood
consumption slowed driving down imports. The short term
prospects for China¡¯s consumption suggest imports are
likely to fall further.
Lanzhou wood processing zone operational
The new wood processing zone close to the Lanzhou Port
in Gansu Province is now operational. Mills in the zone
process imported timber raw materials. The zone occupies
13,100 square metres and imports include scots pine and
radiata pine from Russia, Belarus and New Zealand. Mills
in the zone produce mouldings and decorative panels for
the domestic and international market.
Mandatory emission reductions in wood products
enterprises
Recently Xuzhou City issued an official notice to further
strengthen air pollution prevention and control. The plan
requires inspection of VOCs emissions in many wood
processing enterprises.
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