The China-US trade war escalates
With the third round of US tariffs on US$200bn of Chinese imports, which the US is launching in phases, it is mitigating some of the impact by excluding a number of chemicals in the final list and setting a lower initial tariff rate. The revised final list will initially have a tariff rate of 10% versus the 25% previously announced. In a change, 142 chemicals and finished plastics were removed compared with the preliminary list, according to the American Chemistry Council. The two finished plastics categories that were removed are plastic gloves – seamless and otherwise. This third round will come into effect from 24 September, and the duties are set to rise to 25% by 1 January 2019 if there is no agreement on trade with China.
The final US round-three list includes a total of 1,363 chemicals and plastics products, of which the US imported US$12.9bn worth from China in 2017, noted ACC. As the original list included 1,505 chemicals and plastics products were valued at US$16.4bn, the value of the imports from China of the removed products in 2017 was US$3.5bn.
In retaliation, China announced imposing tariffs on US$60bn worth of US imports, including a 10% tariff on US-origin paraxylene, a polyester feedstock. Initial feedback suggested that the impact on the polyester industry will be limited. The US accounted for around 8% of the world's total paraxylene production in 2017, and is not a major exporter to China. It had earlier proposed a 25% tariff on US-origin paraxylene on 3 August as part of a package targeting around US$60bn worth of US products.
