BLOG: Tariffs, Trump, US-China LDPE and the role of AI

John Richardson

04-Feb-2025

SINGAPORE (ICIS)–Click here to see the latest blog post on Asian Chemical Connections by John Richardson.

I rest of my case! Just 24 hours ago, I wrote:

“WATCH OUT for those who claim they know the final outcomes of President Trump’s latest tariffs on imports from Canada, Mexico, and China.”

And here we are. Overnight, the Financial Times reports:

➡️ Trump Backs Away from Tariffs (For Now)
➡️ Canada & Mexico Strike a Deal to avoid tariffs by stepping up border security and anti-drug trafficking efforts.
➡️ Canada’s Additional Commitments include C$200M in funding to combat fentanyl trafficking and appointing a “Fentanyl Czar.”

The US-China trade relationship has seen big swings in recent years, especially in chemicals and polymers. Consider these shifts in HDPE & LLDPE trade:

  • US HDPE exports to China surged 120% (1.8M tonnes in 2022-24 vs. 0.8M tonnes in 2019-21). Meanwhile, Saudi Arabia’s exports fell 40%.
  • US HDPE sales turnover in China rose by nearly one billion dollars. Saudi Arabia’s turnover was down by $2.3bn. Iran was 1.8bn lower and South Korea 0.52bn lower.
  • US LLDPE exports jumped 190% (3.1M tonnes), while Iran and Thailand saw major declines.
  • US LLDPE sales turnover in China increased by $2.3bn while most of China’s other top ten trading partners saw declines in their turnovers. Thailand saw the biggest decline at $519m followed by Iran at $418m and Singapore at $314m.
  • As today I complete my series by taking a deep dive into US-China LDPE trade, the polymer was different. US exports to China still rose 67%, despite lacking the tariff waivers that helped HDPE & LLDPE.
  • US LDPE turnover in China grew by $577m with the UAE $208m higher as Iran and Saudi Arabia declined by $431m and $206m. respectively.

What does this tell us? Tariffs are just one piece of the puzzle. Other factors—feedstock advantages, market positioning, and China’s self-sufficiency in commodity grades—are all in play.

The bigger question: Where does US-China trade go from here? And how do we build scenarios that factor in Trump’s policies, climate change, and geopolitical shocks?

AI presents an opportunity. It arrived at a time when markets are more complex than ever. We don’t yet know how useful it will be in predicting trade flows, but we do know one thing: The only way to find out is to engage with it.

Thoughts? Let’s discuss.

Editor’s note: This blog post is an opinion piece. The views expressed are those of the author, and do not necessarily represent those of ICIS.

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