China and the U.S. Impose Tariffs on Chemicals and Plastics

The trade war between China and the United States has officially related to the plastics industry, with tariffs on $4.2 billion worth of chemicals and plastics. The two countries officially imposed tariffs on $4.2 billion worth of chemicals and plastics. That sum is likely to rise quickly as the next round of $200 billion of Chinese goods under consideration in Washington includes $25 billion in chemicals and plastics.

On Aug 23, tariffs were imposed on the first batch of plastic resins and materials imported and exported between the two countries. Trade conflicts may be easing as the two countries continue trade talks.

The American Chemistry Council participated in a six-day hearing in Washington, D.C., starting August 20, to oppose the 25% tariff. Chemical companies, including Kraton, also attended and gave written testimony.

In short, they argued that the low-cost shale gas in the U.S. has given U.S. plastics producers a competitive advantage globally, and they worried that the trade war would affect their access to China’s fast-growing market. “The imposition of tariffs will close China’s market for American goods, and our entire industry is preparing to supply chemical products to China. Trade flows between China and the United States will shrink as tariffs rise.” Director of international trade at the American Chemistry Council, told delegates on the first day of the hearing.

The American Chemistry Council released its analysis on August 22, predicting that $8.8 billion in U.S. chemicals and plastics will be hit if China retaliates in the next round of U.S. tariffs on Chinese imports. The next round of $200 billion of proposed tariffs includes $16.4 billion on chemicals and plastics imported from China.

The next round of tariffs, which could come in late September or early October, would affect the industry far more than the one that began on August 23. The first round of tariffs only involved $2 billion worth of American chemical and plastic exports to China and $2.2 billion worth of Chinese exports to the U.S.