WASHINGTON, D.C., U.S. – Once again China will allow the import of dried grains solubles (DDGS) to be imported without charging an 11% value added tax (VAT), according to a post on the China’s Ministry of Foreign Affairs website. 

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 to China. Other areas affected include banking, security and autos. 

“We are pleased to see this move, which we’ve been working toward for months,” said Tom Sleight, president and chief executive officer (CEO) of the U.S. Grains Council (USGC). “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. 

“China’s actions against U.S. DDGS elicited a strong and detailed response from U.S. ethanol and DDGS industries, coordinated by the USGC,” the association said. “The council’s staff members in China and the United States have been working closely with the U.S government at the highest levels for nearly a year to emphasize the importance of this $1.5 billion market to the U.S. grains and ethanol industries.”

U.S. DDGS exports to China fell from 5.4 million tonnes in 2015 to 3.3 million tonnes in 2016 and just 739,000 tonnes so far in 2017.