(Bloomberg) -- Forgive U.S. coal miners for feeling a bit of whiplash over China’s trade policies.
Just two weeks ago, the Chinese government was said to be considering buying more American coal as part of an effort to narrow its trade deficit with the U.S. Now, in retaliation for President Donald Trump’s duties on $50 billion worth of Chinese imports, it’s looking to impose tariffs on imports of U.S. coal, along with a raft of other American goods.
The coal tariffs strike at the heart of Trump’s energy agenda. Since he was elected, Trump has been trying to make good on a campaign promise to revive America’s coal industry. They also come as U.S. miners have grown increasingly dependent on foreign markets for growth. U.S. coal exports jumped by 61 percent in 2017 as shipments to Asia more than doubled. Exports to China totaled 3.2 million tons alone -- more than triple the amount it imported a year earlier, U.S. government data show.
The total value of that trade was about $395 million, based on an average price of $122 a ton, said Andrew Cosgrove, a Bloomberg Intelligence analyst. About 90 percent was metallurgical coal, the kind used to make steel.
Arch Coal Inc., one of America’s largest producers of metallurgical coal in Appalachia, fell as much as 6 percent to $78.12, the most in seven weeks. Warrior Met Coal Inc., another major exporter of met coal, fell as much as 11 percent to $24.52.
The retaliatory duties issued by China will tack a 25 percent tariff on several U.S. coal products, including thermal coal, coking coal and coke, according to a statement on the Ministry of Finance’s website. The start date for the duties have yet to be determined.
A spokeswoman for the Washington-based National Mining Association declined to comment.
©2018 Bloomberg L.P.