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The trade war has spread to the plastics industry, which is also affected
In March, the U.S. government imposed tariffs on imports of steel and aluminum, with the intent of imposing steep tariffs on $60 billion worth of Goods from China. After the incident, China tit-for-tat, The Chinese Ministry of Commerce also on the import of American goods to increase tariffs. It is widely believed that a huge trade war will break out between China and the US. After rounds of negotiations between China and the US, a number of agreements were reached. By late May, the US Treasury Secretary said that the US would "not raise taxes on China or fight a trade war".
Even before the trade war started, China and the United States disappeared into the invisible. Countries around the world expressed their admiration for the measures taken by China and the United States. On June 15, however, things changed again. According to media reports, the US President announced through the White House that he has decided to impose a 25 percent tariff on 50 billion dollars worth of Chinese goods imported to the US. On the same day, the Ministry of Commerce of China responded that the U.S. move is the consensus of the two sides has been formed in disregard, capricious, provoke trade disputes, not only damage the bilateral interests, also destroy the world trade order, on the morning of June 16, then, China's state council released a statement, said decided to originating in 659 about $50 billion in the United States imports of imposing a 25% tariff. Suddenly, the trade war between China and the United States flared up again.
In the face of a tit-for-tat response from China, the US President said he would continue to threaten China with a further $450bn in Chinese goods. According to the data, the us imports about 505 billion US dollars of goods from China every year. If tariffs are imposed on 450 billion US dollars of Chinese goods, 89 percent of the US imports from China will suffer a tariff increase. The chemical and plastics industries, both in the United States and China, will face the threat of higher taxes.
According to the data, of the 545 products subject to tax increases, nearly 100 are chemical products. Canada also imposes a 25% tariff on pipes, oil and gas equipment and facilities in the United States. China is one of the most important trading partners of the U.S. chemical industry. Plastic resins alone accounted for 11% of U.S. exports in 2017, totaling $3.2 billion. The American chemical industry has become one of the largest export industries in the United States by virtue of its advantages in raw materials and technology costs. China's tax increase, which is a key target for the chemical industry, is likely to delay or abandon ongoing U.S. chemical investment plans of up to $194 billion. National groups such as the American Chemical Industry Council and the US Chamber of Commerce complain bitterly.
But the plastics industry, which is closely related to the chemical industry, is also suffering. According to the data, 25 products designed for the plastics industry are on the US tariff list of $50 billion of goods imported from China, involving export value of $425 million.
Domestic experts said that the trade war between China and the United States continues to escalate, which is bound to have a great impact on China's plastic industry. The oil and chemical industries are one of the important chips in the game between the two sides, and the trade war will cause a rise in the price of some high-end plastic products in China, which will have a certain impact on the plastic industry. In terms of China's export of plastic machine products alone, in 2017 China exported nearly 860,000 plastic machine products, of which 300,000 were exported to the United States. These exports to the United States plastic machine products will face a tax increase.
Experts at the China Light Industry Federation said that although the plastics industry faces the impact of the tariffs imposed by the trade war, the impact is not fatal and is not the top problem for the domestic plastics industry. Although the trade war will increase the price of high-end plastic products, it will also promote the industrial transformation, the development of new driving forces and the adjustment of industrial structure of the domestic plastic industry.
And China's domestic market prospect is still good, domestic consumption upgrade for the plastics processing industry brought a broad space for development, the domestic light industry products still maintain a competitive advantage in the world, "One Belt And One Road" also for the development of light industry, such as plastic industry has brought great opportunities, so a trade war would cause the throes of plastic industry, but will not cause great influence to the plastic industry. The main problem of the domestic plastic industry is the low profit margin. For example, in 2017, China imported 210,000 plastic machines with the import value of US $1.741 billion. The export volume of plastic machinery is nearly 860,000 units, but the export volume is only 2.24 billion US dollars. The export price of monomer is much lower than that of import. Therefore, the primary problem of the domestic plastic industry is to improve the price of monomer and the profit margin of enterprises. Plastics-related enterprises should take the initiative to upgrade industrial structure, improve product innovation ability and enhance their own competitiveness is the key.
