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Insight | Time:Aug 9 2018 2:20PM
Impacts of China's 25% tariff on US imported petrochemical products
 
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The Sino-US trade war continued to escalate. The US Trade Representative Office (USTR) announced on August 7 that it will impose a 25% tariff on US$16 billion worth of Chinese exports to the US from August 23.

On the evening of August 8, the Chinese Ministry of Commerce announces a 25 percent charge on $16 billion worth of U.S. goods from 12:01 on August 23, 2018.

List of some related products:
HS code product
27071000 Crude benzene
27101220 Naphtha
29012100 Ethylene
29012200 Propylene
29012410 Butadiene
29022000 benzene
29025000 Styrene
39014020 LLDPE
39012000 HDPE
19053100 1,2-ethylene glycol
29173611 Pure terephthalic acid
29261000 Acrylonitrile
39021000 homo PP
39023010 co PP
39023090 ra coPP

Naphtha:
The US accounted for 6.2% or 416kt of China's naphtha imports in 2017.

Olefins:
69kt of ethylene and 7kt of propylene were imported from the US, accounting for 3.2% and 0.23% of the total in 2017.
The US accounted for 6.2% or 24kt of China's butadiene imports in 2017.

Glycol:
The US accounted for 2% or 183kt of China's ethylene glycol imports in 2017.

Raw materials for chemical fibers:
The US accounted for 22% or 60kt of China's acrylonitrile imports in 2017.

The impact on PTA is negligible, as PTA is almost self-sufficient in China and the import from US is zero.

Aromatics:
The US accounted for 0.98% or 24kt of China's benzene imports in 2017.

The US ranked third among exporting countries, accounting for 9.5% or 306kt of China's styrene imports in 2017. Styrene imports from the US have reduced obviously since June when China implemented 13.7-55.7% anti-dumping duties on styrene monomer. If an additional 25% tariff is imposed, US styrene would see an increase of 38.7-80.7% duties in 2018, and it will be theoretically difficult for US styrene to enter Chinese market.

Plastic:
In 2017, China imported 127kt of LLDPE from the United States, accounting for 4.2% of total LLDPE imports; HDPE imported from the US was 298kt, accounting for 4.7% of all HDPE imports.

In 2017, China imported 105.5kt homo PP from the United States, 3.32% of all homo PP imports, and co PP imports from the US was 43.3kt, accounting for 3.12%.

Other plastic products such as HIPS (HS code 39031910), GPPS (HS code 39031990), ABS (HS code 39033010, 39033090) are listed in the list of 25% tariff items on August 3, 2018.

Without Sino-US trade war, the import of PE from the United States is expected to increase in 2018. After the 25% tariff is imposed, import directly from the US-based plants will be impacted. But as some US companies have factories in other regions of the world, the overall impact will be limited. The import amount of PP is already small, and the PP imported from the United States is basically from "processing/assembling with imported materials", so the impact is small.

In summary, impact from tariffs on US imports is mainly concentrated in products such as acrylonitrile and styrene. For the remaining products, imports from the United States account for a relatively small amount and will have limited impact.
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