President Donald Trump's March 22 announcement of $60 billion in punitive tariffs against Chinese manufactured goods did not provide all that much clarity.
Sure, the White House ceremony, complete with fanfare and high-ranking officials looking on, was much anticipated in manufacturing circles. After a lot of talk about whether Washington would be changing direction on China policy, what would be coming down from the White House?
But to learn what it might mean for manufacturers generally, or plastics specifically, we may need to keep waiting, at least for a little while.
We still don't know which products could face tariffs. The U.S. government will announce a draft list within 15 days, followed by a 30-day public comment period and a hearing. After that, presumably, a final decision.
Trump used his pulpit to clearly repeat his desire to redraw U.S. trade policy.
He echoed long-standing complaints that groups like the National Association of Manufacturers have about China, including poor protection of intellectual property and Chinese requirements that foreign companies in key sectors (like auto) have local joint ventures, where they must share technology.
Trump's main target is the $375 billion trade deficit in manufactured goods the U.S. had with China in 2017, by far the largest with any country.
The plastics industry too, in most sectors, has a trade deficit with China.
Overall, the U.S. plastics industry had a $10.2 billion deficit with China in 2016, the last year figures are available from the Washington-based Plastics Industry Association. That's the largest deficit with any country.
Broken down, it's a $12.3 billion deficit in plastic products, a $375 million deficit in molds and a more modest $212 million deficit in plastics machinery.
Only one segment of plastics, resins, had a surplus. U.S. plastics raw materials makers shipped $2.7 billion more in materials to China than the United States imported.
The Trump administration's solution to manufacturing's woes with China is to slap tariffs to improve the trade balance and get more cooperation on IP and market entry.
Trump didn't mention it in his public statement, but a 200-page companion report that came out the same day from U.S. Trade Representative Robert Lighthizer took aim squarely at China's latest industrial policy, its Made in China 2025 plan to support 10 key industries.
I noted that because I hear a lot about Made in China 2025 when I travel to trade shows like Chinaplas, or in the business plans of companies. The 10 targeted industries include several that plastics are closely involved in, including new energy vehicles and new materials.
Pretty much universally, U.S. manufacturing wants to see a tougher line on China. But the debate breaks down over what exactly to do.
A few days before the Trump administration's announcement, a coalition of more than 40 business groups, including the U.S. Chamber of Commerce, urged the president not to enact tariffs.
They feared retaliatory tariffs on U.S. agriculture (which is what China seems to be preparing to do) and they said tariffs would raise costs for U.S. companies and consumers, making firms less competitive.
“There are alternatives to address China's policies and practices that would not have the same adverse impacts on U.S. consumers, businesses, and local communities or undermine the benefits of the tax reform,” they said.
Still, many in manufacturing were urging that more be done on China IP and market access issues.
For example, the Motor and Equipment Manufacturers Association, which represents 1,000 auto parts makers, said it was concerned that Made in China 2025 policies requiring 80 percent local Chinese content in new energy cars could lead to forced technology transfer.
Trade policy is always a delicate balance, as the Trump administration found when it announced, and then fairly quickly softened, its planned steel and aluminum tariffs.
With the China policy rollout, it seems to be taking a more cautious approach: make a big announcement, and then sketch in the specifics later. The immediate reaction from the markets was not positive. The Dow Jones industrial average dropped almost 3 percent, partly on fears of more trade conflicts.
Will that force a more cautious approach when the details finally come out? Stay tuned.
Get Economics Editor Bill Wood's take on the impact of tariffs in Numbers That Matter.