China's Ministry of Finance Announces Sliding-Scale Tariff Plan for Cotton Imports in 2014

China’s Ministry of Finance has announced the sliding-scale tariff plan for import of cotton in 2014.

The tariff, applicable for cotton imports excluded from volume under import quotas, is as follows:

a. If the cotton import quoted price equals or exceeds 15,000 yuan per ton (equivalent to 110.98 US cents per lb based on US$/RMB exchange rate of 6.1305), the unit tax of 570 yuan per ton will be applicable.

b. If the price of imported cotton is below 15,000 yuan per ton, the sliding-scale tariff rate will be calculated according to the formula:

Ri = 9.337/Pi +2.77 %×Pi -1 (Ri<=40 %); where Ri = sliding scale tariff rate (the calculation shall be rounded off at the third decimal place), and Pi = imported cotton quoted price (in yuan/kilogram).

Compared with the 2013 sliding-scale tariff, there are three modification made in the 2014 plan. First, the threshold of sliding-scale tariff has been raised from 14,000 yuan per ton to 15,000 yuan per ton. Second, in the formula 9.337 replaces 8.87 used in the previous formula. Third, 2.908% in the previous formula is replaced with 2.77% in the new formula.