VIENNA (ICIS)--The ongoing US-China trade war has had little impact on the aromatics industry so far, but in the end it will increase the cost of commodities and that will not be helpful to customers, an industry executive said on Monday.
“At the end of the day trade war is something that will hurt the customer,” Kuwait Paraxylene Production Company (KPPC)’s CEO Mahmoud H Al-Qattan told ICIS on the sidelines of the 52nd annual European Petrochemical Association (EPCA) meeting.
The US-China trade war escalated last month as a third round of tariffs involving $260bn worth of goods was implemented on 24 September.
The US’ 10% tariffs on $200bn Chinese goods and China’s retaliatory 5-10% tariffs on $60bn US goods on 24 September was the latest salvo since the trade war started between the world’s two biggest economies.
The US will raise the tariff rate on the products covered by the latest round to 25% by 1 January 2019, while in the first two rounds – on 6 July and 23 August – 25% tariffs were slapped on a total of $50bn worth of goods on each side.
The US is threatening to impose tariffs on a further $267bn worth of Chinese goods, covering all of its imports from the Asian economic giant.
Al-Qattan said he believed that the aromatics industry would not see a major impact because aromatics and polyester was not major in the US, unlike autos and electronics where the US had a big presence.
“So far we have not seen that impact just yet. But we are looking at consultants to help us understand the changes on the trade flows, the market flows and I think so far they are not deep into our [aromatics] area.
“But once they get to that stage, then definitely polyester will be affected, PET [polyethylene terephthalate] will be affected, PTA [purified terephthalic acid] will be affected,” he added.
The annual EPCA meeting runs in Vienna on 8-10 October.
Interview article by Tahir Ikram
(Image by Shutterstock)
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