VAC asks the US not to impose tariffs on chemicals, plastics

The International Trade Director of the American Chemistry Council on Wednesday urged the Trump administration to remove China's $ 16 billion tariff of chemicals and plastics from the list. its competitive advantage.

"Costs will increase in the United States, not only for our member companies, but also for downstream industries that buy US-made chemicals, including farmers and the manufacturers". the office of the US Trade Representative, said Wednesday in remarks prepared for the second day of the USTR's public hearings on the issue in Washington

"These tariffs will weaken the competitiveness of the US chemical industry and the United States as a whole ". Brzytwa referred to a $ 16 billion list of Chinese goods duties that the United States wants to impose, the second $ 50 billion in addition to those imposed on steel and steel. 39, aluminum in March.

The first round of $ 34 billion in Chinese goods duties was introduced on July 6, and China responded by enforcing duties on US goods of equal value, mainly agricultural and automotive. China has published a more detailed list of chemicals and plastic products of the same value as would be implemented in response.

President Donald Trump also announced his intention to tax $ 200 more. tariffs of billions of dollars on Chinese products that also include a series of chemicals and plastics, but this list can not be implemented until the month of September to allow its own comments and hearings.

Tariffs involving chemicals in the context of escalating trade tensions between the United States and China, particularly in light of the announced investments of $ 194 billion in the manufacture of chemicals .

He urged chemical manufacturers to commit to building a series of steam crackers and derived plants along the American coast of the Gulf of Mexico, Pennsylvania and potentially Ohio. The first wave of this type began in 2017.

The operation and five others will follow until 2019, including the imminent start of the new ExxonMobil cracker at 1.5 million tons / year in Baytown, Texas, near Houston. Of the 13 polyethylene plants that start in the same period, seven are operating and another six will come on stream this year and next.

A second and third potential wave of crackers and derivative factories is underway for 2020 and beyond. The Shell complex in western Pennsylvania, the first of its kind in the northeast rich in ethane

Most, if not all, of the new resin produced by the new infrastructure waves will be exported.

But if China retaliates with tariffs on US chemicals and resins as expected, the United States will lose the advantage it derives from cheap ethane compared the more expensive naphtha that feeds most Asian crackers. US chemical manufacturers are advantageously competitive with Chinese producers where there are no tariffs in the United States and China does not respond, "said Brzytwa.

He added that such retaliation would make the list of customs duties of US $ 16 billion for Chinese products includes lubricating oils, the multiple grades of polyethylene used to make plastic bags and food packaging, the Expanded polystyrene used to make foam and polypropylene food containers often used in automotive plastics. US recipes of these chemicals from China are minimal, but the list also targets plastics made with them, which fill the shelves of supermarkets.

China's $ 16 billion list of US retaliatory products includes "We believe China may have targeted US exports of chemicals because it's an area in which the United States is ready to grow chemical exports. most, "said Brzytwa." The fact that China has included these products in its tariff schedule is an acknowledgment of the competitiveness of the US chemical industry and the challenge it poses for the US. China's growing chemical industry. "

– Kristen Hays, [email protected]

– Keingle Greenhalgh Editor, [email protected]