U.S. Chemical and Manufacturing Organization Is Against Its Government to Raise Tariffs
On May 10, the U.S. government raised its tariff on the $200 billion imported Chinese commodities in accordance with the plan, which suffered the opposition from Chemical and Manufacturing Trade Organization.
The appeal, from American Chemistry Council (ACC) and National Association of Manufacturers (NAM), said that China and the U.S. should solve the trade dispute without resorting to tariffs.
Last year, the U.S. imposed tariffs on the $200 billion Chinese commodities for the first time, which was the largest scale of tariff imposed by the U.S. in the past. According to the estimation of ACC, at present, the total amount of newly added tariffs imposed on Chinese commodities by the U.S. reached $250 billion. Hereinto, chemicals and plastics takes up above $15 billion.
According to ACC, The retaliatory tariffs imposed by the Chinese government on the U.S. commodities also affected nearly 11 billion US chemicals and plastics exported to China, restricting 55,000 employees and $18 billion economic activities.
“Competitive Strength Erosion”
Cal Dooley, the President and CEO of ACC, said that China is the third largest export market of the U.S. chemical industry, and the trade war is destroying the development of the industry.
“There are signs indicating that the tariff is now disrupting the supply chain, fragmenting the market, and weakening the competitiveness of the US chemical manufacturing industry,” Dooley said, “Although the import volume of Chinese chemicals increased by 22.7% in 2018, the retaliatory tariffs hit the U.S. chemical exported to China badly, leading to only 2.7% of growth in 2018. The chemical trade deficit widened from $1.4 billion to $4 billion, almost tripled from last year.”
Dooley said that the U.S. chemical industries, including plastic producers, preferred others actions to solve the trade dispute between the two countries.
He said: “The future growth of our industry depends on maintaining strong trade relations with China and providing investors with certainty and predictable trade policies, rather than being threatened by more or higher tariffs.”
A statement from SOCMA (Society of Chemical Manufacturers & Affiliates) said that increasing tariffs to 25% would “distribute a disproportionate burden on specialty chemical manufacturers”, in part because of the high global integration of the industry.
The $200 billion in Chinese commodities, which is imposed tariffs by the U.S., includes certain grades of plastic products, including plastic floor and certain types of plastic packaging and caps. The U.S. packaging manufacturer Pactiv LLC has been lobbying the government for imposing tariffs.
These are not the only tariffs imposed on plastics industry products. In a round of taxation last year, the U.S. government decided to impose a 25% tariff on Chinese-made injection machines.
The $200 billion commodities announced this time were first imposed on tariffs in September last year. The above tariffs were originally planned to be increased from 10% to 25% on January 1, but as the negotiations continued, the U.S. government postponed this round of tariff increases.
Besides, the U.S. imposed a 25% tariff on Chinese-made injection molds for the first time in July last year, and increased tariffs in January after the protests from U.S. mold buyers.
The U.S. has always had a trade deficit with China in terms of plastics, machinery and molds, and there is a trade surplus in resin. In 2017, the U.S. trade surplus with China's resin was $2.9 billion, and the trade deficit of plastic products was $13.6 billion.
The U.S. president Donald Trump also threatened on Twitter that he would impose tariffs on $325 billion of Chinese commodities that have not yet been imposed tariffs.
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