China tariffs on U.S. ethanol to cut off imports in short-term

Chinese buyers of U.S. ethanol will have to cut imports because of higher tariffs, but eventually will have to return to the overseas market to meet government targets for using the fuel, industry participants and analysts said on Monday. China said late on Sunday it will slap an extra 15 percent tariff on ethanol imports from the United States, part of its response to U.S. duties on aluminium and steel imports. The previous duty was 30 percent. The tariffs, effective Monday, will neutralize cost savings from importing cheaper U.S. ethanol versus domestic supply, said three sources that participate in the market. Ethanol, an alcohol typically produced from corn or sugar, is often mixed with gasoline to reduce air pollution from vehicle emissions. “The price difference is gone. We will suspend imports for now,” said a manager at a private oil refinery, adding that he was considering turning to domestic suppliers for ethanol to blend into gasoline.