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Sino US Trade War Started, The Plastics Industry Fluctuated Less, Petrochemical, Energy Industry Or One Of The Main War Zones
- Jul 06, 2018 -

  During the Dragon Boat Festival, a Sino US trade war launched by the United States flounded.

  In the face of China's rational and counterproductive measures, the Trump government not only did not accept it, but made a proclamation yesterday, and threatened to make a 200 billion - dollar tax list. In response, the Chinese side said that such extreme pressure and blackmail had deviated from the consensus of the two sides and made the international community very disappointed. If the US side loses its rationality and makes a list, China will have to take comprehensive measures combined with quantity and quality to make strong countermoves. 

  In the second half of this year, the plastics industry has been involved. In China's list, plastics and their products involve 22 kinds of goods, accounting for 2.67% of China's total imports from the United States, and 61.60% of the total tariff. Compared with energy and chemical products, the plastics industry is less affected. Based on a comprehensive analysis, the impact of the Sino US trade war on plastics industry is as follows:

  General plastic articles

  This levy on us and Canada involves general plastics such as HDPE, LDPE and PVC.

According to the statistics of relevant agencies, China imported about 6% of LDPE from the United States in 2017. In the future, the production capacity of polyethylene device in the United States is more. As one of its products, the future US imports are likely to increase. But after adding 25% tariffs, it will also limit American products to a certain extent. Import and reduce the price competitiveness of the US source of goods, the gap will bring opportunities for the Middle East goods with high cost in recent years.

  Although PVC imports only 306 thousand and 500 tons from the United States in 2017, it accounts for 39.7% of the total total import of PVC. In addition, it is worth noting that our country still carries out anti-dumping duties on imported PVC originating in the United States (September 28, 2018, our country imposed anti-dumping duties on imports of PVC originating in the United States, South Korea, Japan and Taiwan region), And the main trade way imported from the United States is mainly material processing, the specific impact remains to be observed, but one point can be determined that, under this tariff policy, even if the anti-dumping expiration is cancelled, American PVC products want to enter the Chinese market with a low price advantage, which has become a luxury. It is most likely to backfire, and it will be a serious blow to the relevant enterprises in the United States. 

  American Chemical Industry: a day before the US government policy was disappointed, the ACC issued a statement calling for effective measures to protect the chemical industry from the impact of trade friction. The statement said the association expressed disappointment at the US government's policy. ACC believes that the government has now placed the US chemical industry directly on the front line of this conflict with China and has not listened to the demands of the industry. ACC appealed to the US government to listen to the views and concerns of the chemical industry in the future to prevent further escalation.

  ACC stresses that 96% of manufactured goods in the United States involve chemicals, which are the basis of the entire North American supply chain. Thanks to the low cost of raw materials and chemical production facilities, the chemical industry has become one of the largest export industries in the United States, accounting for 14% of the total exports of the United States. On the other hand, China is one of the most important trading partners in the US chemical industry. In 2017, China accounted for 11% of all plastic resins in the United States, or 3 billion 200 million US dollars.

  ACC warned that trade friction would damage us production. Trade frictions will lead to a drop in chemical demand, as many as 24 thousand jobs in American and downstream industries will be lost, and half of the US $194 billion chemical industry investment plan is likely to be delayed or abandoned and global market volatility.

  Combined with the history of Sino US trade friction, it can be predicted that Sino US trade will show a continuous conflict in the future. Especially in the environment of the US government and other market factors, the Sino US trade war is doomed to be a protracted war like a marathon.