BEIJING (Reuters) – China will remove the value-added tax on imports of distillers dried grains (DDGS), the foreign ministry said in a statement on Thursday, a move set to boost purchases from top exporter the United States.

The news followed talks in Beijing between President Xi Jinping and his U.S. counterpart, Donald Trump.

And though punitive anti-dumping tariffs on imports of DDGS from the U.S. remain in place, traders and analysts said the step could still boost demand by Chinese buyers.

Imported DDGS arriving at southern Chinese ports is currently around $10 per tonne higher than the domestically produced ingredient, priced at 2,200 yuan ($331) per tonne.

“The import margin is still not there, but if the corn price in the U.S. falls, then probably people will start to import again,” said the trader in Beijing.

Market expectations that Trump’s visit could lead to an overhaul of tariffs had already triggered a few small, test shipments in recent days, said the trader.

“A buyer in the south told me he had already booked around 20,000 tonnes,” he said.

China imported 375,413 tonnes of DDGS in the first nine months of this year, down 86 percent on the same period of last year, customs data showed. <GRA/CN>

Rumors have also swirled in recent weeks that China could agree to lower import tariffs on ethanol. Beijing hiked import duties to 30 percent this year, effectively shutting down a booming trade in imports.

($1 = 6.6400 Chinese yuan)