President Donald Trump's latest escalation in the US-China trade war targets 10% tariffs on all Chinese imports that do not yet face such taxes, including a wide array of petrochemical-reliant finished plastics and products.
Among the $300 billion in targeted Chinese products are smartphones, laptops, toys, toilet seats, mustard and ketchup dispensers, plastic dishes and trays, picture frames, statuettes, beads and a catch-all category of "other articles of plastics," according to the proposed list on the Office of the United States Trade Representative's website.
Other produces include items made with vulcanized rubber, which has been treated to be flexible and resistant to heat, such as conveyor belts and hoses, medical gloves and pet toys.
Other petrochemical-heavy products on the list include polyester yarns and fabrics, travel hygiene sets, crayons, combs and hair pins, dental floss, fireworks, de-icing fluids, wallpaper and shoes with rubber soles.
On Friday, a day after Trump tweeted his intent to impose the new tariffs on September 1 as recent talks with China failed to produce a trade deal, Hua Chunying, spokeswoman for China's foreign ministry, said China would "take necessary countermeasures" to protect its interests.
"China believes there is no winner in a trade war. We do not want a trade war, but we are not afraid of fighting one," she said in comments posted on the ministry's website Friday. "China does not accept any maximum pressure, threat or blackmail."
The trade war already has affected the US petrochemical industry. Last year the US imposed tariffs on $250 billion in Chinese products, and China responded with $110 billion in tariffs on US goods. In the petrochemical sphere, US tariffs have targeted both raw materials and products made with them, while Chinese tariffs targeted hundreds of raw materials used to make plastics, rubber and other materials.
The American Chemistry Council has strongly opposed tariffs, saying the trade war could jeopardize the US' growing status as a global supplier with more than $200 billion in new chemical infrastructure that aims to export most output to Asia, with China easily the most dominant demand market.
As was the case ahead of the third round of tariffs the US imposed on Chinese products last year, the US likely will see a surge of imports at the peak of shipping season as companies seek to pre-empt the additional costs, according to supply chain research firm Panjiva Research. Peak shipping for toys and videogames is in October for Christmas shopping season, while peak shipping for laptops hits twice: August for back-to-school sales, and November depending on model release schedules, Panjiva said.
Panjiva, like S&P Global Platts, is a division of S&P Global.
In June, the USTR received more than 2,800 public comments from companies, organizations and citizens on the $300 billion in products targeted for new tariffs.
Bert Eshaghpour, president of Wego Chemical Group, a family business that imports specialty chemicals from China for domestic distribution, said in June that previous petrochemical tariffs have already impacted costs and supply chains in the US. More chemicals on the proposed $300 billion list are manufactured only in China, he said. Those include chemicals used in automotive, food, paper and construction industries.
"There are no other choices or alternatives," Eshaghpour said in a letter to the US Trade Representative Robert Lighthizer.
In another such letter to Lighthizer, Stanley Bernard, vice president of growth and development at Drexel Chemical Company, a Tennessee pesticide manufacturer, said US agriculture's four most widely used pesticide ingredients are on the proposed $300 billion list and are not made in the US.
"Drexel and the small farmers who use our generic crop protection products cannot withstand the addition" of tariffs "on our most important products - products for which we have no domestic supply," Bernard wrote.
