The Trump Administration’s decision to raise tariff rates from 10 to 25% on $200 billion in Chinese imports will disproportionately burden specialty chemical manufacturers, according to a statement released by the Society of Chemical Manufacturers & Affiliates (SOCMA). Specialty chemical supply chains are particularly dependent on China because, in many cases, China is the sole supplier of raw materials and building block chemicals. The fact that chemical tariff lines made up nearly half of the de-listings for List 3 speaks volumes regarding the degree to which certain inputs are simply unavailable outside of China at reasonable costs and in sufficient quantities, if at all.
“While SOCMA supports the Administration’s end goal of zero tariffs and improved IP protection in China, a 25 percent tariff on $250 billion in Chinese imports will place a significant burden on our members and the industry,” said Jennifer Abril, president and CEO of SOCMA. “Whether it is pigments, agrochemicals, or pharmaceuticals, specialty chemicals are vital inputs to critical sectors of American industry. These sectors are thriving but cannot continue to sustain the volatility introduced by these actions. We have illustrated the interdependency of these supply chains to USTR at every opportunity and have stressed the need for a product exclusion request process for List 3. The promised exclusion process in today’s Federal Register notice acknowledges this, and SOCMA looks forward to working with the Administration towards an expeditious and transparent process for evaluating List 3 exclusion requests.”
The U.S. has levied tariffs on 1,517 Chinese-origin chemical products valued at roughly $15.4 billion. China has levied retaliatory tariffs on more than 1,000 chemical and plastics products valued at roughly $10.8 billion. As the U.S. and China negotiate the sequencing of tariff removal, SOCMA reports that it is proactively monitoring and advocating on behalf of the specialty chemical industry, particularly advocating for USTR to roll back tariffs on chemical products in Harmonized Tariff Schedule chapters 28, 29, 32, and 38, as soon as possible.
For more information, visit www.socma.com.