On April 2, 2025, Donald Trump signed two “reciprocal tariff” executive orders at the White House, imposing a 10% “minimum baseline tariff” on over 40 trade partners with which the U.S. runs trade deficits. China faces a 34% tariff, which, combined with the existing 20% rate, will total 54%. On April 7, the U.S. further escalated tensions, threatening an additional 50% tariff on Chinese goods starting April 9. Including three previous hikes, Chinese exports to the U.S. could face tariffs as high as 104%. In response, China will impose a 34% tariff on imports from the U.S. How will this impact the domestic chemical industry?
According to 2024 data on China’s top 20 chemical imports from the U.S., these products are primarily concentrated in propane, polyethylene, ethylene glycol, natural gas, crude oil, coal, and catalysts—mostly raw materials, primary processed goods, and catalysts used in chemical production. Among them, saturated acyclic hydrocarbons and liquefied propane account for 98.7% and 59.3% of U.S. imports, with volumes reaching 553,000 tons and 1.73 million tons, respectively. The import value of liquefied propane alone hit $11.11 billion. While crude oil, liquefied natural gas, and coking coal also have high import values, their shares are all below 10%, making them more substitutable than other chemical products. The reciprocal tariffs may increase import costs and reduce volumes for goods like propane, potentially raising production costs and tightening supply for downstream derivatives. However, the impact on crude oil, natural gas, and coking coal imports is expected to be limited.
On the export side, China’s top 20 chemical exports to the U.S. in 2024 were dominated by plastics and related products, mineral fuels, mineral oils and distillation products, organic chemicals, miscellaneous chemicals, and rubber products. Plastics alone accounted for 12 of the top 20 items, with exports worth $17.69 billion. Most U.S.-bound chemical exports make up less than 30% of China’s total, with polyvinyl chloride (PVC) gloves being the highest at 46.2%. The tariff adjustments may affect plastics, mineral fuels, and rubber products, where China has a relatively high export share. However, Chinese companies’ globalized operations could help mitigate some of the tariff shocks.
Against the backdrop of escalating tariffs, policy volatility may disrupt demand and pricing for certain chemicals. In the U.S. export market, large-volume categories like plastic products and tires could face significant pressure. For imports from the U.S., bulk raw materials such as propane and saturated acyclic hydrocarbons, which rely heavily on American suppliers, may see notable impacts on price stability and supply security for downstream chemical products.
Post time: Apr-18-2025