A broad range of chemical products has been drawn into the escalating trade battle between China and the United States.
China today announced plans to impose a 25% tariff on US exports of 106 products worth about $50 billion/year including several key chemicals, including certain grades of polyethylene (PE) and polyvinyl chloride (PVC) as well as soybeans and cars. The announcement is a response to the Trump Administration’s announcement on Tuesday of about 1,300 Chinese exports that it intends to target with tariffs of 25%, also worth an estimated $50 billion/year.
The United States ran a $1.4 billion trade deficit in chemicals with China last year, according to US Commerce Department data compiled by ACC. US chemical exports to China totaled $11.5 billion 2017, roughly 9% of all US chemical exports. US chemical imports from China totaled $12.9 billion, roughly 13% of all chemicals imports. The United States, however, does run a significant export surplus in plastic resins. US resin exports to China totaled $3.2 billion in 2017, roughly 11% of all resin exports. Resin imports from China totaled $799 million.
There are more than 40 chemicals or chemical-related products on the list, covering feedstock, intermediates, plastics, and downstream plastic and rubber items such as certain types of film, sheet, and tape. Products include acrylonitrile; acrylic polymers; certain catalysts and copolymers; low-density polyethylene (LDPE); lubricants; non-ionic organic surfactants; nylon; polycarbonate; polyester; polyethylene terephthalate sheet, foil, and flat strip; PVC; and liquid propane.
ACC urged the US and Chinese governments to work together before the situation escalates further. “China is one of the U.S. chemical industry’s most important trading partners, importing 11%, or $3.2 billion, of all U.S. plastic resins in 2017,” said ACC president and CEO Cal Dooley. “We are particularly concerned that 40% of the products to which China has assigned new tariffs are chemicals, including polyethylene, PVC, polycarbonates, acrylates, and others.”
ACC noted that the dispute may negatively impact nearly $185 billion in announced US chemical investments that are predicated on current tariff schedules. “We strongly urge the US and China to reach a productive and meaningful agreement before any of the proposed tariff schedules go into effect,” Dooley said.
The United States is by far the leading exporter of acrylonitrile by volume with Ineos’s Green Lake, Texas, plant shipping large volumes to Asia on a regular basis, says IHS Markit. US exports of acrylonitrile to China have been steady at about 80,000 metric tons/year in recent years, according to IHS Markit data. “We’re expecting this number to increase in the short term but this will begin to decline as we’re expecting China to bring new capacity online,” IHS Markit says.
China’s announcement has stoked fears of a full-blown trade war between the United States and China. The United States originally announced tariffs on imports of steel and aluminum, which prompted China early this week to introduce or increase tariffs on a range of US products including ethanol. The subsequent US announcement of tariffs on 1,300 Chinese products targets China’s aerospace, robotics, technology, and machinery industries, as well as medical equipment and educational material. The Trump Administration has also cited a longstanding investigation by the US Trade Representative into alleged Chinese theft of US intellectual property.
It is not clear when the two sets of tariffs will take effect. China’s Ministry of Commerce says that the timing of its tariffs will be announced separately. Analysts say that the lack of clarity on timing opens the way for negotiations between the United States and China on a possible deal to end the trade dispute.
By Ian Young
Source: Chemical Week
France has launched an offshore green hydrogen production platform at the country’s Port of Saint-Nazaire this week, along with its first offshore wind farm. The hydrogen plant, which its operators say is the world’s first facility of its type, coincides with the launch of another “first of its kind” facility in Sweden dedicated to storing hydrogen in an underground lined rock cavern (LRC).
The project sets up the Hydrogen Valley in Rome, the first industrial-scale technological hub for the development of the national supply chain for the production, transport, storage and use of hydrogen for the decarbonization of industrial processes and for sustainable mobility.
At first glance, hydrogen seems to be the perfect solution to our energy needs. It doesn’t produce any carbon dioxide when used. It can store energy for long periods of time. It doesn’t leave behind hazardous waste materials, like nuclear does. And it doesn’t require large swathes of land to be flooded, like hydroelectricity. Seems too good to be true. So…what’s the catch?