China imposes 15% additional tariffs on coal imports from US

• India leading importer of US coal in Jan-Nov'24
  
  
• China emerged as second-largest importer in 11MCY'24
  
  

China's State Council Tariff Commission has announced that starting 10 February 2025 additional tariffs will be imposed on certain imported goods originating from the United States. Among these, US coal will face a 15% tariff, marking a significant move in trade relations between the two countries.

Industry analysts suggest that the tariff increase could lead to higher costs for Chinese buyers, potentially shifting procurement strategies towards alternative suppliers such as Indonesia, Australia, and Russia. Meanwhile, the US coal sector may have to explore alternative markets to mitigate the impact of reduced Chinese demand.

The move comes amid ongoing trade tensions between China and the US, reflecting broader geopolitical and economic tussles. Market observers will be closely watching how these tariffs influence trade flows and energy pricing in the coming months.

US coal export scenario

In 2024, US coal exports reached 126.84 million tonnes (mnt) through to November, a 7% increase from January-November'23, as per BigMint statistics. Coking coal led the growth, making up 38% at 46.5 mnt, while non-coking coal and pet coke each accounted for a share of 29% in total exports, reaching 36.5 mnt and 36.4 mnt, respectively. Metallurgical coke exports were 1.3 mnt, anthracite coal 0.6 mnt, while 5.6 mnt was classified as "other coal."

Key markets

India emerged as the largest importer of US coal, receiving 28.2 mnt in the first 11 months of 2024, an 8% increase y-o-y. China, a significant buyer, imported 15 mnt, representing a substantial 54% y-o-y jump. Brazil's coal imports from the US totalled 10 mnt, a modest rise of 3% from the previous year. However, coal exports to Japan saw a sharp decline, with 9.97 mnt shipped, reflecting an 11% drop y-o-y.

Outlook

The new tariffs are expected to reduce US coal exports to China, prompting China to seek coal from other suppliers. This will have a major impact as China is a leading buyer of US coal. This is bound to lead to shifts in trade flows, hinted sources.