Correction: The ICIS article headlined “US quietly rolls back raft of China chemicals tariffs” dated 14 September 2018 was clarified throughout, as it had suggested that the Miscellaneous Tariff Bill rolled back the China tariffs being imposed by US President Donald Trump. The bill applies to earlier tariffs imposed on a variety of countries before the trade war began. A corrected headline and story follows.
LONDON (ICIS)--US President Donald Trump has approved the rollback of sanctions on numerous chemicals by signing a bill to reduce the impact of import tariffs on domestic industry.
A variety of forms of plastics products are included in the list of over 1,600 products to see reduced or removed tariff burdens.
Originally passed unanimously by the US Senate in July, over 50% of products listed in the Miscellaneous Tariff Bill (MTB) Act 2018 are chemicals, according to American Chemistry Council (ACC) estimates.
That total moves up to 60% including plastics, the council added.
A total of over 100 finished plastic products are mentioned in the list.
The bipartisan bill was backed by the US’ National Association of Manufacturers (NAM), which released a letter signed by 150 business organisations earlier this month, claiming that the measures would reduce unnecessary import costs on products not made or available in the US.
“This is a relic of our country’s outdated tariff code,” the associations said in the joint letter.
The bill is likely to eliminate $1m/day of import tariffs worth a total of around $800m in savings through 2020, the association said.
Importantly, the MTB law does not void the US 25% tariffs on a total of $50bn in Chinese imports in rounds 1 and 2 which are additional tariffs. It also would not void any planned US tariffs on $200bn in Chinese imports in round 3. It simply reduces the normal rate on all imports listed on the MTB to zero or by a significant amount.
The US and China introduced matching salvos of $50bn in punitive tariffs through July and August of this year, but the US concluded hearings on $200bn of additional tariffs on over 6,000 Chinese goods, and Trump is pushing publicly for a further $267bn on top of that.
The $200bn tranche would stand to have a far more substantial impact on global trade than the initial set of tariffs, but it is not clear when, or if, those will be introduced.
The ACC this week welcomed the news that Trump had approved the measures, stating that the MTB would bolster the competitiveness of the US chemicals industry by continuing to allow access to raw materials from China.
“By signing MTB into law, the President has affirmed his support for US chemicals manufacturers who rely on select foreign inputs to retain our position as the world’s leading, low-cost producer of chemicals," it said.
Writing on social media network Twitter, Trump disputed the idea that the US was softening its stance on China, as the two powers prepare to re-enter talks.
"We are under no pressure to make a deal with China, they are under pressure to make a deal with us," he said.
"Our markets are surging, theirs are collapsing. We will soon be taking in billions in tariffs and making products at home."
Additional reporting by Joseph Chang in New York.