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China Reallows Exemption From Value Added Tax For U.S. DDGS

China Reallows Exemption From Value Added Tax For U.S. DDGS
An announcement was posted last week on China’s Ministry of Foreign Affairs' website that the country would again allow U.S. distiller's dried grains with solubles (DDGS) to be imported without charging an 11 percent value added tax (VAT), potentially impacting global DDGS market dynamics for the better.
 
The announcement was made in a report of key areas of consensus between the United States and China during President Donald Trump’s official visit this week. Other areas impacted include banking, security and autos. 
 
"We are pleased to see this move, which we've been working toward for months," said Tom Sleight, U.S. Grains Council (USGC) president and CEO. "This change will immediately improve the competitiveness of U.S. DDGS in what was once our top market, which is a very positive thing."
 
In January 2016, China’s Ministry of Commerce announced it would begin anti-dumping and countervailing duty investigations related to U.S. DDGS exports to its country. Those cases resulted in duties applied to U.S. DDGS and the ending of an ongoing exemption from paying the VAT. The combination of the duties and the VAT made U.S. DDGS exports to China even less competitive, affecting market prices and export flows globally. While the VAT has been removed, the anti-dumping and countervailing duties remain.
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