China confirms tariff-reduction framework for US coal imports

The US and China have agreed to include Chinese imports of US coal in the reciprocal tariff-reduction framework, a move expected to facilitate imports in 2027 and 2028, China's Ministry of Commerce said Sept. 28.

The coal arrangement forms part of the broader "30-for-30" framework, covering approximately $30 billion of imports in each direction. The framework is not yet in force, with both countries required to complete their domestic legal procedures before tariff reductions are implemented.

"Following President Trump's revival of the U.S. coal industry, China will import at least 10 million metric tons of coal from the United States in 2027 and again in 2028," the White House said in a statement issued Sept. 25.

The announcement could revive US-China coal flows and reshape existing US export patterns following several years of tariff and geopolitical barriers.

"The two sides agreed to reduce tariffs on about 30 billion U.S. dollars' worth of goods imported from each other on a reciprocal basis, with tariffs on around 90 percent of the covered products to be lowered to most-favored-nation rates," the ministry said in its statement Monday. "These reductions will be implemented simultaneously after each side completes domestic legal procedures."

The agreement emerged from the eighth round of China-US economic and trade consultations, held in New York and Washington from Sept. 20 to 23.

China's Ministry of Commerce said the two sides had reached "positive consensus," contributing to outcomes from a meeting between the two heads of state.

The ministry said including US coal in the framework was expected to "complement China's domestic coal market while providing stable revenue and employment for the U.S. coal industry, helping to stabilize and expand bilateral trade." It did not specify whether the tariff reductions would apply to metallurgical coal, thermal coal, or both.

Met coal flows

Metallurgical coal accounted for 96% of US coal exports to China over the past 10 years, according to data from S&P Global Commodities at Sea, indicating that renewed trade could primarily benefit US met coal producers and Chinese steelmakers.

China imposed an additional 25% tariff on US coking coal in August 2018, disrupting flows during the US-China trade war. India has since emerged as a major destination for US metallurgical coal, becoming its largest individual export market in 2024.

Renewed Chinese buying could therefore increase competition for US cargoes currently sold to India and other established markets, although the impact will depend on the final tariff treatment, coal grades covered and delivered economics.

"At 28% duty, coal still won't flow," an Indian buyer said, indicating that Chinese demand would be unlikely to return without a material reduction in the effective tariff.

India remained the top destination for US coal exports in the second quarter with 6.7 million mt, up 22.3% year over year.

US low-vol met coal supplies have been tight since the start of the year, with demand seen coming from Asian destinations.

On the high-vol side, supplies have remained comparatively healthier with several mines coming online, such as Leer South coming back online earlier this year, as well as Allegheny's Longview mine and Core's Leer South mine.

Platts, part of S&P Global Energy, assessed low-vol hard coking coal unchanged at $210/mt FOB US East Coast Sept. 28. High-vol A hard coking coal remained at $195/mt FOB USEC, while high-vol B hard coking coal was unchanged at $170/mt FOB USEC.