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American Chemistry Council Says Section 301 Tariffs Invite 'Damaging Retaliation'

The U.S. chemicals industry would be hit hard as a result of Section 301 tariffs on goods from China, the American Chemistry Council said in a news release in response to the White House's planned implementation of the tariffs (see 1805290039). "While five percent of the 1,333 products the [Office of the U.S. Trade Representative] has identified for a 25 percent tariff relate to chemicals, the effects of the full list of tariffs are likely to be felt well beyond the business of chemistry," ACC Director of International Trade Ed Brzytwa said. "If applied, these duties will invite damaging retaliation and advantage China’s growing industry at the expense of American production and workers. We anticipate significant disruptions to supply chain operations, offshoring of production, and termination of production altogether due [to] the sudden, uneven playing field that tariffs would create in the global marketplace."

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The risks are amplified by China's likely response to the tariffs, Brzytwa said. “China’s retaliatory tariffs would hit the U.S. chemicals industry, not once, but twice, by closing the China market both to our exports and to exports of products using chemicals in their production, including agricultural goods and autos," he said. "The tariffs on downstream products will lead to less demand for those products and therefore less demand for U.S.-made chemicals."