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Chemicals at risk in spat with China

Trade in chemicals between the U.S. and China is robust and roughly equal

by Jean-François Tremblay
April 2, 2018 | A version of this story appeared in Volume 96, Issue 14

No one knows yet what products would be hit as part of a Trump administration plan to impose tariffs on Chinese imports, but chemicals are unlikely to emerge unscathed from any U.S.-China trade conflict.

President Donald J. Trump announced on March 22 that the U.S. will impose tariffs on about $60 billion worth of Chinese goods to punish the country for technology and trade-secret theft. The White House said it will reveal the list of goods within 15 days of Trump’s announcement.

The plan followed a separate U.S. proposal to impose tariffs on aluminum and steel produced in China and other countries.

In response to the March 22 announcement, China threatened a countermeasure that would target about $3 billion worth of American goods, including fresh fruit, nuts, and wine. Officials hinted that a fuller response could follow.

In a statement, the Chinese embassy in the U.S. vowed that “if a trade war were initiated by the U.S., China would fight to the end to defend its own legitimate interests.”

Chemicals represented about 10% of total U.S. merchandise exports to China in 2017. The proportion rises to more than 14% if plastics are included. In 2017, the U.S. shipped $21.5 billion worth of chemicals and plastics and $19.5 billion in agricultural products to China.

The American Chemistry Council, the main trade group for the U.S. chemical industry, says the situation is too fluid to accurately estimate the impact of tariffs on the industry. A spokesman says a team will likely meet soon to discuss advocacy strategy. ACC was critical of the planned steel tariffs and earlier threats by Trump to pull out of the North American Free Trade Agreement.

Even before the U.S. announcement, chemicals were vulnerable to trade conflicts. In a preliminary ruling last month, China found the U.S., Taiwan, and South Korea guilty of dumping styrene in China. The ministry of commerce demanded that manufacturers from those countries pay a deposit in case the final ruling confirms the dumping.


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