Washington — As negotiators shuttle between China and the United States trying to strike a trade deal, the American Chemistry Council is urging that chemicals and plastics get specific consideration in any potential agreement.
ACC CEO Cal Dooley suggested Feb. 27 that as Presidnet Donald Trump's administration presses China to buy more U.S. farm goods and aircraft, it should make sure that chemicals are on the list, since they've been among the hardest hit sectors in the tariff fight between Washington and Beijing.
"If the president also seeks a commitment from China to purchase more U.S. goods, then chemicals, the heart of all U.S. manufacturing, offer the most promising and advantageous opportunity for U.S. export growth," Dooley said, in a statement.
ACC argued that the chemical sector has suffered as the two countries have put tariffs on about $300 billion in total trade. As part of the broader fight, China has slapped tariffs on $11 billion in U.S. chemical and plastics exports, in retaliation for U.S. tariffs on $15 billion in Chinese chemicals and plastics exports, ACC said.
Dooley said much of the $202 billion in shale gas related investment in new U.S. chemical and plastics production is targeted at export markets, suggesting it's a good choice for purchase commitments.
"Chemicals have been one of the key sectors affected by the U.S.-China trade dispute since the beginning — and now, they could serve as one of the pillars underpinning a potential resolution," Dooley said. "To get there, we strongly urge the U.S. and China to agree to exclude all chemical products from their respective tariff lists."
An ACC spokesman said there is no specific indication that chemicals and plastics would get purchase commitments in any deal. But the association pointed to recent Trump administration statements touting pledges from Beijing to buy more U.S. agricultural, energy and manufactured and industrial goods.
While the U.S. plastics industry has an overall trade deficit with China — in 2017, it was $11.5 billion — the plastics resin sector that ACC represents has a trade surplus with China. In 2017, the last full year figures are available, that resin surplus was $2.87 billion.
China is the world's largest buyer of plastics materials.
Dooley made the comments in response to U.S. Trade Representative Robert Lighthizer's testimony to Congress earlier in the day on the ongoing trade talks.
President Trump said on Feb. 24 he would hold off on a March 1 deadline to raise U.S. tariffs from 10 percent to 25 percent on $200 billion in Chinese exports, citing progress in the ongoing talks.
In testimony before the House Ways and Means Committee Feb. 27, Lighthizer did not directly address ACC's suggestion. But he did say that larger structural changes were a key priority and that additional purchases of goods would not resolve U.S. concerns.
"This administration is pressing for significant structural changes that would allow for a more level playing field — especially when it comes to issues of intellectual property rights and technology transfers," Lighthizer said. "The issues on the table are too serious to be resolved with promises of additional purchases. We need new rules."
The head of the House Ways and Means Committee, Rep. Richard Neal, D-Mass., said he supported the Trump administration's tougher approach and also said commitments of additional purchases would not be enough.
"As we near the finish line, we are hearing once again about very large purchase commitments for commodities like soybeans and natural gas, along with aircraft," Neal said. "This administration has chosen to take the path of a high-risk confrontation with China. It must hold out for a good deal — a structural deal."
