Plastics News Europe - June 2019 - 7

MARKETS & BUSINESS

Trump's 25% tariffs will boost EU
plastics exports, say experts
By Liz Newmark, in Brussels

nited States President Donald
Trump's announcement, May
10, to slap 25% additional tariffs on plastics exports to China could
increase opportunities for European
plastics exporters, experts have told
Plastics News Europe.
Mike Boswell, managing director
of UK-based plastics products supplier
Plastribution, said: "Sales could increase to the US, depending on which
items, as US products will become
more expensive because of
duty barriers." The former British Plastics Federation president said
time would tell what
"could be substituted in terms of finished products."
Trump committed to increase tariffs
from 10% to 25% on
products with an annual
trade value of around
$200/€179.6bn
179.6bn worth of Chinese goods and to introduce fresh
ones on another $325/€292bn worth
"shortly" - his officials are consulting
on this proposal.
The top three US imports of Chinese
goods facing the tariff increase are telecommunications equipment (annual
value of imports $19.1/€17.15bn),
computer circuit boards ($12.5 bn/
€11.22bn) and processing units
($5.6bn/€5.03bn), according to US International Trade Commission data.
All these goods include plastics.
Vinyl tile floor coverings ($2.5bn/
€2.24bn) - number eight on the list
- are directly targeted. Other commodities affected include other plastic floor and wall coverings, tubes,
hoses, boxes, bags, gloves and rain
jackets, as well as plastic injection
moulds and machinery for working
plastics. They also cover a wide range
of plasticisers and plastics waste
(http://bit.ly/2M5ZrGo).
According to the EU's statistical office Eurostat, China is the world's
largest plastics producer, accounting
for 29.4% of global plastics production, followed by Europe (18.5%) and
NAFTA - the US, Canada and Mexico
(17.7%).
The decision to put tariffs on Chinese exports of these products supplied to the US by Chinese manufacturers could increase the EU's sales to
the US as a result.
The EU exported €57.5bn worth

JUNE 2019

of plastics in 2018,
up from €55.8bn in
2017. And EU plastics exports to the US
were worth €8.2bn in
2018 and €7.7bn in 2017,
Eurostat said.
A spokesperson from European association of plastics manufacturers
PlasticsEurope said the European plastics industry "has a good and
long-standing relationship with many
countries" in terms of trade. The US is
already the EU's top destination for
plastics processing products and second highest for manufactured products, the organisation notes in its
'Plastics, the Facts 2018' publication.
In 2017, the proportion of EU plastics processing exports sent to the US
were 15% of the total, ahead of Switzerland (11%) and China (9%). Some
13% of extra-EU (trade outside the
EU) plastics manufacturing exports
went to the US, behind Turkey (15%)
and just ahead of China (12%).
A US government statement released May 9 in the US Federal Register said the US and China had been
trying to reach a trade deal since
December 1, 2018.
"In the most recent negotiations,
China has chosen to retreat from specific commitments agreed to in earlier
rounds" and, because of the lack of
progress, Trump asked the US Trade
Representative "to increase the rate
of additional duty to 25%t" on a
range of tariff lines.
This would be paid over and above
any pre-existing duties the US may
have levied on these Chinese plastic
sector exports.
The new tariffs will only apply to

cargoes leaving China after May 10.
But, coming on top of tariffs on
$250bn/€224.5bn worth of goods in
December 2018, China accused the
US of starting "the largest trade war
in economic history".
The world's most populous country hit back with additional tariffs on
$60/€54bn of US imports into China,
which includes plastic goods such as
apparel, shoes and furniture; plastics
manufacturing machinery; caps; primary plastics shapes; and plasticisers.
This in theory could open more China
export market sales up for European
producers, now that American competitors are hobbled. The EU already
has a significant export trade in plastic items to China, with international

Mike Boswell, Plastribution: "Sales
could increase to the US, depending
on which items, as US products will
become more expensive because of
duty barriers"
trade data indicating that this was
worth €6bn in 2017, of which sales
of EU-made plastics tubes, pipes, hoses and fittings generated receipts of
€390 million, for instance.
On May 23, China ministry of
commerce spokesperson Gao Feng
said: "If the US would like to keep on
negotiating it should, with sincerity,
adjust its wrong actions. Only then
can talks continue."
At the time of writing, Trump
showed no signs of backing down
either.

http://www.bit.ly/2M5ZrGo

Plastics News Europe - June 2019

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