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June 15, 2018 02:00 AM

New US tariffs on China include more resins

Steve Toloken
Assistant Managing Editor
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    U.S. Trade Representative
    Lighthizer

    Plastics seems to be taking a larger place in the U.S.-China trade conflict, with the Trump administration announcing new tariffs June 15 that are heavy on resins, as it moves ahead with previously planned tariffs on plastics machinery and molds.

    The American Chemistry Council criticized the U.S. decision, saying it was “disappointed” that the U.S. government added “large amounts of plastics” to the list and “has now put U.S. chemical manufacturing directly against China at the front lines of this conflict.”

    U.S. Trade Representative Robert Lighthizer unveiled a new round of $16 billion in tariffs, with a detailed 10-page list that includes five pages of plastics materials, including polypropylene, polyethylene, vinyl, fluoropolymers, acrylic, polycarbonate and PET.

    The new round also includes plastic tubes, pipe and hose, along with sheet and film.

    The U.S. statement also said it was moving ahead with $34 billion in tariffs on Chinese products first announced in April, a list that includes many types of plastics machinery and molds. It said the U.S. government would begin collecting those duties July 6.

    “We must take strong defensive actions to protect America's leadership in technology and innovation against the unprecedented threat posed by China's theft of our intellectual property, the forced transfer of American technology, and its cyberattacks on our computer networks,” Lighthizer said.

    ACC, however, focused its June 15 statement on what it sees as risks to chemical and plastics makers in the escalating tariffs. It said as much as half of the planned $194 billion in shale-gas led chemical investments in the United States could be at risk of being abandoned.

    “Recognizing the importance of U.S. chemicals to our economy, China will continue to retaliate against U.S. chemical manufacturers with tariffs on exports of raw, building-block chemicals and on the numerous products that are made with chemicals,” ACC said. “We anticipate significant disruptions to supply chain operations, offshoring of production, and termination of production altogether due [to] the sudden, uneven playing field that duties would create in the global marketplace.”

    ACC said China imported $3.2 billion in U.S. resin in 2017.

    “Enabling a retaliatory trade war will only advantage China's growing industry at the expense of American production,” ACC said.

    The resin tariffs still must undergo public comment, including a public hearing.

    The United States in recent years has had a resin trade surplus with China. In 2016, the last year figures are available from the Plastics Industry Association, the U.S. had a surplus of $2.7 billion in plastics materials with China.

    The inclusion of many resins on the newest Trump administration list may be part of the tit-for-tat tariffs between the two governments. China's retaliatory tariffs to the first April list of U.S. tariffs included many categories of U.S. plastics resin exports.

    Lighthizer said in a statement that the products in the latest list were identified “as benefiting from Chinese industrial policies, including the ‘Made in China 2025' industrial policy.”

    The U.S. has had a trade deficit with China in machinery, molds and plastics products in recent years. In 2016, the deficit for plastics machinery was $212 million, for molds it was $375 million and for products it was $12.3 billion.

    The National Association of Manufacturers said it had concerns with Chinese trade practices but argued against tariffs. Instead, it urged the Trump administration to negotiate a trade agreement with China.

    “Manufacturers certainly have concerns that tariffs will cause more problems than they solve, but we also recognize that the administration may intend to use them as a negotiating tactic to bring China to the table and achieve larger goals,” said NAM CEO Jay Timmons.

    A spokeswoman for the Plastics Industry Association said it was still assessing this latest announcement and referred back to an April statement that said the deficit with China stems from structural issues and urged the two countries to find solutions other than tariffs.

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