China's taxing America's coal just as it was looking to buy more
NEW YORK – Forgive US coal miners for feeling a bit of whiplash over China’s trade policies.
Just two weeks ago, the Chinese government was said to be considering buying more American coal as part of an effort to narrow its trade deficit with the US. Now, in retaliation for President Donald Trump’s duties on $50-billion worth of Chinese imports, it’s looking to impose tariffs on imports of US coal, along with a raft of other American goods.
The coal tariffs strike at the heart of Trump’s energy agenda. Since he was elected, Trump has been trying to make good on a campaign promise to revive America’s coal industry. They also come as US miners have grown increasingly dependent on foreign markets for growth. US coal exports jumped by 61% in 2017 as shipments to Asia more than doubled. Exports to China totaled 3.2-million tons alone -- more than triple the amount it imported a year earlier, US government data show.
The total value of that trade was about $395-million, based on an average price of $122 a ton, said Andrew Cosgrove, a Bloomberg Intelligence analyst. About 90% was metallurgical coal, the kind used to make steel.
Arch Coal, one of America’s largest producers of metallurgical coal in Appalachia, fell as much as 6% to $78.12, the most in seven weeks. Warrior Met Coal, another major exporter of met coal, fell as much as 11% to $24.52.
The retaliatory duties issued by China will tack a 25% tariff on several US coal products, including thermal coal, coking coal and coke, according to a statement on the Ministry of Finance’s website. The start date for the duties has yet to be determined.
A spokeswoman for the Washington-based National Mining Association declined to comment.
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