May 7, 2019 Updated 5/7/2019
Office of the U.S. Trade Representative A container ship heads into a U.S. port.
The American Chemistry Council is pushing back against President Donald Trump’s plan to raise tariffs on $200 billion in imports from China if Washington and Beijing are unable to agree on a new trade pact in talks this week.
In a statement late May 6, ACC said that “the risks of continuing to use tariffs as a negotiating tactic with China are simply too high — and any potential benefits still unclear.”
U.S. Trade Representative Robert Lighthizer told reporters May 6 that Washington was preparing to raise tariffs on May 10 on $200 billion in Chinese imports, from their current 10 percent level to 25 percent. President Trump first tweeted over the weekend that he planned to raise the tariffs.
U.S. officials accuse China of backtracking on previous commitments in the trade talks. A spokesman for China’s Foreign Ministry told reporters that Beijing has “good faith” in continuing talks and that “raising tariffs won’t resolve any problem.”
The tariffs on $200 billion in imports from China were first imposed last year, in the largest of several rounds of U.S tariffs. ACC estimates that total U.S. tariffs on $250 billion in Chinese imports thus far include more than $15 billion in chemicals and plastics.
ACC said Beijing’s retaliation to those tariffs has also hit nearly $11 billion in U.S. chemical and plastics exports to China and have put 55,000 America jobs and $18 billion in U.S. economic activity at risk.
ACC President and CEO Cal Dooley said in a statement that China is the 3rd-largest export market for the U.S. chemical industry, and that the trade war is hurting the industry.
“We are starting to see signs that the tariffs are disrupting supply chains, cutting off markets, and eroding U.S. chemical manufacturing competitiveness,” Dooley said. “Although chemical imports from China grew by 22.7 percent in 2018, the retaliatory tariffs significantly dampened U.S. chemical exports to China, resulting in only a 2.7 percent increase in 2018 — nearly tripling the chemicals trade deficit, from $1.4 billion to $4.0 billion.”
Dooley said that the U.S. chemical sector, including plastics materials makers, prefer other solutions to trade problems with China, rather than tariffs and counter-tariffs.
“Future growth for our industry depends on a strong trading relationship with China and a trade policy that creates certainty and predictability for investors, not a looming threat of more or higher tariffs,” Dooley said.
This $200 billion round of tariffs also includes duties on some categories of plastic products, including vinyl flooring and some types of plastic packaging and closures. U.S. packaging maker Pactiv LLC had lobbied for tariffs.
Several large U.S. makers of vinyl flooring had urged Washington to impose the tariffs, saying it would benefit investment in U.S. factories. But other companies and importers argued it would raise home construction costs.
These are not the only tariffs on plastics industry goods. Tariffs on Chinese made injection molding machines, also at 25 percent, were imposed in an earlier round of tariffs last year.
The $200 billion at issue now first were imposed in September. Originally, the 10 percent duties were supposed to rise to 25 percent on Jan. 1 but that had been delayed while talks continued.
As well, 25 percent tariffs on Chinese-made injection molds, first imposed in a July round of tariffs, were lifted in January after protests from U.S. mold buyers.
President Trump also threatened in comments on Twitter over the weekend to impose tariffs on the remaining Chinese imports, estimated at $325 billion. That would require another regulatory rulemaking from Washington.
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