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Chinese Import Tariff to be adjusted in 2017

January 03, 2017

China recently announced an adjustment on its import tariff starting in 2017. Produce Report has recently verified with our source that the import tariff on avocados will still be entitled to the privilege of a 10% tax from 2016 (previously 25%), while the import tariff on blueberries has been cut to 15% from the previous 30%.

Mexico and Canada are the greatest beneficiaries from this adjustment. Concerning the Mexican avocado, because the other major exporting countries such as Chile and Peru were already exempt from customs duty due to their FTA with China, only need to pay a 13% value-added tax. It was not a fair fight for Mexico; however, after the decrease, the composite tax rate for Mexican avocados which is now 24.3%, only 11.3% higher than that of their Latin American competitors. This grants more advantages regarding their pricing on the Chinese market, hence giving a better chance to Mexican avocado exporters.

As for the Canadian blueberry, China's domestic market has great potential, but the only countries from which blueberries can be imported are Chile and Canada. From a price perspective, Canadian blueberries are at disadvantage. Aside from relatively high labor costs, Canadian blueberries also have a tax rate of 46.9 percent, while the tax rate on Chilean blueberries is 13 percent. Together with the strong competitiveness of domestic blueberries, the market share of Canada is relatively small. It is obvious that the reduction of  the tariff will decrease the cost of import, and therefore improve competitiveness.

 

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