According to a statement issued by the White House in recent days, the United States will still impose a 25% tariff on 50 billion U.S. dollars of Chinese goods. The specific list of goods will be announced on June 15. The tariff will be implemented shortly thereafter.
The spokesperson of the Ministry of Commerce of the People's Republic of China quickly responded that we were both surprised and surprised at the strategic statement issued by the White House. This is obviously contrary to the consensus reached between the two sides in Washington not long ago. What measures China has has confidence, ability and experience to safeguard the interests of the Chinese people and the country’s core interests. China urges the United States to act in accordance with the spirit of the joint statement.
Faced with Trump's face change, the US industry is very helpless.
American chemical industry is worried
The American Chemistry Council (ACC) warned that levying import tariffs on Chinese products would bring huge losses to US chemical manufacturers!
A statement issued by the ACC on May 29 stated: 'Recently, the conflicting report on the U.S. government’s position on China’s trade has caused great concern for American chemical manufacturers and chemical-dependent downstream industries.’
The statement stated: 'Although only 25% of the 1333 products previously identified by the U.S. Trade Representative Office were related to chemicals, the impact of the full tariff list may be far beyond the scope of the chemical industry.'
'If these tariff measures are implemented, they will incur destructive retaliation, and at the expense of the interests of U.S. producers and workers, will be beneficial to China's growing (chemical) industry. 'The ACC anticipates that this is for the global chemical industry. Supply chain, production outsourcing and production will have serious impact.
The ACC warned: 'China's (retaliatory) tariffs will have an impact on the US chemical industry, not a one-time, but a double blow. ' 'Because the Chinese market is closed against (the United States), including exports of US chemicals, as well as production. The use of chemical products in exports, such as agricultural products and automobiles. '(China) impose tariffs on downstream products, will lead to reduced demand for these products, so the demand for US chemicals will also be reduced accordingly.
The US chemical industry and the downstream industry will lose at least 24,000 jobs. Therefore, the ACC urges the United States to shelve the 'trade war' intention and stop potential tariff barriers.
In recent years, with the advent of shale oil and gas drilling, the cost of key raw materials such as ethane has been reduced. Chemical production has become the largest driving force for US manufacturing growth. US chemical plants use cheaper natural gas liquids such as ethane. Other naphtha producers are more competitive.
According to the American Chemical Industry Council (ACC) data, the US has attracted more than 300 chemical investment projects just because of its advantage in shale gas resources, with capital expenditures up to 185 billion US dollars.
The total capacity of nearly 200 basic chemicals in North America tracked by IHS Markit shows that not all of these projects will be implemented. However, the increase in the capacity of petrochemicals still dominates, especially the ethylene chain will accelerate development.
The political climate in the United States has complicated the decision-making of capital projects. The American Chemical Industry Council (ACC) once stated: 'If the cost of construction or maintenance of chemical production facilities becomes suddenly more expensive, chemical companies will not be able to develop or innovate quickly. '
Sino-U.S. trade friction is a factor that must be taken into consideration by the US chemical industry. ACC Chairman Carl Dooley once pointed out: 'The President’s tariff policy is very bad for the announced US$185 billion new factory and expansion project. More than half of these investment projects are still in the planning stage, and the market changes caused by the increase in tariffs may make investors choose to go elsewhere for business.
China is one of the most important trading partners of the US chemical industry. In 2017, the United States exported 11% of its total exports to China, accounting for US$3.2 billion.
According to Platts data, under the impetus of shale gas boom in North America, the capacity of the US ethylene market will increase by more than 35% in 2019. During 2017-2026, the US ethylene production capacity is expected to rise by approximately 33.7 million tons to reach 48.65 million. Ton.
Demand for domestic growth in the United States is not expected to absorb increased capacity. Asia, especially the Chinese market, is expected to become the main destination for US PE exports.