China Removes 3% Import Tariff on Australian Coking Coal

China has signed a free trade agreement with Australia to remove import tariff on coking coal; the FTA was signed in Canberra on 17 June, 2015.

China, world’s largest coal importing country, signed a free trade deal with Australia, under which import tariff on imported Australian coking coal will be removed. This information comes from Australia’s Department of Foreign Affairs and Trade (DFAT).

1. The implementation of the FTA will immediately cut the import tariff on coking coal from the current 3% to zero.

1. The import tariff will be cut on PCI from the current 6% to zero over three years; based on the indicative schedule provided by DFAT.
2. 4% in the first year
3. 2% in the second year
4. Zero Import duty in the third year

Although China has signed a FTA with Australia, relaxation on duty will take a little time to come into force; since it requires many domestic legal and parliamentary processes in both the countries. Also, the agreement would need to be reviewed by Australia’s Joint Standing Committee & the Senate Foreign Affairs, Defence & Trade References Committee.

Removal of import duty may increase import of coking coal from Australia as the country supplied about 50% of China’s total imports. On the other hand, China-Australia FTA will unlock opportunities for Australia.

China’s coking coal imports fell by 24% to 14.67 MnT since the beginning of 2015 Y-o-Y, as per customs data.

Earlier on 15 Oct’14, China had announced 3% import duty on imported coking coal. The government had levied import duty to support domestic miners, who were struggling with rising costs and falling prices.