Latest US, Chinese tariff proposals cover wide swath of petchems, oil products

HOUSTON (ICIS)–The latest tariff proposals by the US and China cover a wide swath of petrochemicals and oil products, with the US list alone covering more than 150 different chemicals and derivatives.

Photo above shows a cargo ship on the Houston Ship Channel. Photo by Al Greenwood

China’s proposed tariffs are not as numerous, but it also includes kerosene, diesel and other oil products as well as crude, propane and natural gas.

The American Chemistry Council (ACC) estimates that $5.4bn in US exports of chemicals and plastics would be exposed to China’s proposed tariffs. If demand does not decline and tariffs are at 25%, then the Chinese government would collect $1.3bn in duties.

The chemical and refined-products tariffs that were proposed by China and the US made up a second set of duties, and they did not specify a date on which they would go into effect.

The first set from both countries would go into effect on 6 July.

A list of the proposed chemical and oil-product tariffs from China and the US is at the bottom. It includes the codes for each product’s harmonised tariff schedule (HTS).

During the year, both the American Fuel & Petrochemical Manufacturers (AFPM) and the American Chemistry Council (ACC) have spoken out against the proposed tariffs.

At the AFPM’s International Petrochemical Conference (IPC) in March the group’s president deemed a US-China trade war as the No 1 threat to the industry.

The ACC also singled out a trade war during its more recent Annual Meeting, which was held in June.

Following the latest tariff proposals, the ACC said the US chemical industry has now been thrust on to the front lines of a trade war with China.

Market players and executives have been more measured in their response to the proposed tariffs.

For polyethylene terephthalate (PET), the effect should be limited. US imports from China fell sharply since antidumping duties imposed in 2016. Also, China is not among the top sources of imported PET.

For propane, China relies on it as feedstock to produce on-purpose propylene at its propane dehydrogenation (PDH) units.

Market sources said tariffs could disrupt trade flows, but US propane exports will eventually find a destination.

“It could put a damper on propane and butane; however, there are many other markets besides China that have an increasing appetite for both,” said a US-based natural-gas liquids (NGLs) broker.

Chinese tariffs on US acrylonitrile (ACN) exports may cause price inflation in China. However, while trade flows in the region may move around, net flows to global regions will likely remain stable.

According to one producer in the US, trade flows will probably “adjust to fit the new laws but the net flows to the regions will be the same”.

Executives expressed similar sentiments during the most recent earnings conference calls held earlier this year.

Rising demand for products such as polyethylene (PE) will have to be met, regardless of tariffs.

In this scenario, Chinese customers would replace US imports with PE shipments from other countries. The US will then export its PE to customers that saw their resin shipments diverted to China.

With that, trade flows would change, but demand would remain the same.

US polyvinyl chloride (PVC) market players were surprised by the announcements earlier this year that China’s list of potential retaliatory tariffs included polyvinyl chloride (PVC) and feedstock ethylene dichloride (EDC or 1,2-dichloroethane.)

China is the US’s second-largest PVC export market after Canada and the largest buyer of US EDC.

China already has import fees on US PVC, but these are not applied if the resin imported from the US is then made into products that are re-exported. Most US PVC exports to China are treated this way and market participants expect that that arrangement will continue. If that happens, then the proposed tariffs should have little impact on US PVC trade flows.

The fate of US EDC trade with China is harder to discern. It is not clear if the same rules will apply.

Declining shipments in recent months may be an indicator that market participants see that business as threatened by the tariffs.

About 40% of the EDC imported into China in February originated in the US. US EDC exports to China account for about 28% of the nation’s EDC shipments in 2017, according to data from the International Trade Commission (ITC).

US EDC producers have in the past year found new buyers in Brazil and in Europe. In Brazil, Braskem has de-bottlenecked its PVC plant and is buying EDC to increase vinyls production.

In Europe, chlor-alkali plant closures have left a couple of PVC plants in the Mediterranean market without ready access to chlorine. Inexpensive EDC from the US appears to be working for the feedstock.

That has put current estimates of the tariff outcome as likely rearranging trade routes, but not necessarily upsetting the markets.

US proposed tariffs

HTS codes	Product
27071000	Crude benzene
27072000	Crude toluene
27073000	Crude xylene
27101930	Lubricating oils, w/or w/o additives, fr petro oils and bitumin minerals (o/than crude) or preps 70%+ by wt fr petro oils
27101935	Lubricating greases from petro oil/bitum min/70%+ by wt fr petro oils but n/o 10% by wt of fatty acid salts animal/vegetable origin
27101940	Lubricating greases from petro oil/bitum min/70%+ by wt fr petro oils > 10% by wt of fatty acid salts animal/vegetable origin
34031910	Lubricating preparations containing 50% but less than 70% by weight of petroleum oils or of oils obtained from bituminous minerals
34031950	Lubricating preparations containing less than 50% by weight of petroleum oils or of oils from bituminous minerals
34039900	Lubricating preparations (incl lubricant-based preparations), nesoi
38112100	Additives for lubricating oils containing petroleum oils or oils obtained from bituminous minerals
38112900	Additives for lubricating oils, nesoi
39011010	Polyethylene having a specific gravity of less than 094 and having a relative viscosity of 144 or more, in primary forms
39011050	Polyethylene having a specific gravity of less than 094, in primary forms, nesoi
39012010	Polyethylene having a specific gravity of094 or more and having a relative viscosity of 144 or more, in primary forms
39012050	Polyethylene having a specific gravity of 094 or more, in primary forms, nesoi
39013020	Ethylene copolymer: Vinyl acetate-vinyl chloride-ethylene terpoly w/ < 50% deriv of vinyl acetate, exc polymer aromatic/mod arom monomers
39013060	Ethylene-vinyl acetate copolymers, nesoi
39019010	Polymers of ethylene, nesoi, in primary forms, elastomeric
39019055	Ethylene copolymers, in primary forms, other than elastomeric
39019090	Polymers of ethylene, nesoi, in primary forms, other than elastomeric
39021000	Polypropylene, in primary forms
39022010	Polyisobutylene, elastomeric, in primary forms
39022050	Polyisobutylene, other than elastomeric, in primary forms
39023000	Propylene copolymers, in primary forms
39029000	Polymers of propylene or of other olefins, nesoi, in primary forms
39031100	Polystyrene, expandable, in primary forms
39031900	Polystyrene, other than expandable, in primary forms
39032000	Styrene-acrylonitrile (SAN) copolymers, in primary forms
39033000	Acrylonitrile-butadiene-styrene (ABS) copolymers, in primary forms
39039010	Methyl methacrylate-butadiene-styrene (MBS) copolymers, in primary forms
39039050	Polymers of styrene, nesoi, in primary forms
39041000	Polyvinyl chloride, not mixed with any other substances, in primary forms
39042100	Polyvinyl chloride, mixed with other substances, nonplasticized, in primary forms
39042200	Polyvinyl chloride, mixed with other substances, plasticized, in primary forms
39043020	Vinyl chloride copolymer: Vinyl acetate-vinyl chloride-ethylene terpoly w/< 50% deriv vinyl acetate, exc polymer aromatic/mod arom monomers
39043060	Vinyl chloride-vinyl acetate copolymers, nesoi
39044000	Vinyl chloride copolymers nesoi, in primary forms
39045000	Vinylidene chloride polymers, in primary forms
39046100	Polytetrafluoroethylene (PTFE), in primary forms
39046910	Fluoropolymers,elastomeric, other than polytetrafluoroethylene, in primary forms
39046950	Fluoropolymers, other than elastomeric and other than polytetrafluoroethylene, in primary forms
39049010	Polymers of vinyl chloride or of other halogenated olefins, nesoi, in primary forms, elastomeric, in primary forms
39049050	Polymers of vinyl chloride or of other halogenated olefins, nesoi, in primary forms, other than elastomeric, in primary forms
39051200	Polyvinyl acetate, in aqueous dispersion
39051900	Polyvinyl acetate, other than in aqueous dispersion, in primary forms
39052100	Vinyl acetate copolymers, in aqueous dispersion
39052900	Vinyl acetate copolymers, other than in aqueous dispersion, in primary forms
39053000	Polyvinyl alcohols, whether or not containing unhydrolyzed acetate groups, in primary forms
39059110	Copolymers of vinyl esters or other vinyls, in primary forms, containing by weight 50% or more of derivatives of vinyl acetate
39059150	Copolymers of vinyl esters or other vinyls, in primary forms, nesoi
39059980	Polymers of vinyl esters or other vinyl polymers, in primary forms, nesoi
39061000	Polymethyl methacrylate, in primary forms
39069010	Acrylic polymers (except PMMA) in primary forms, elastomeric
39069020	Acrylic plastics polymers (except PMMA), in primary forms, nonelastomeric
39069050	Acrylic polymers (except plastics or elastomers), in primary forms, nesoi
39071000	Polyacetals in primary forms
39072000	Polyethers, other than polyacetals, in primary forms
39073000	Epoxide resins in primary forms
39074000	Polycarbonates in primary forms
39075000	Alkyd resins in primary forms
39076100	Polyethylene terephthalate, having a viscosity number of 78 ml/g or higher
39076900	Polyethylene terephthalate, having a viscosity number less than 78 ml/g
39077000	Poly(lactic acid)
39079120	Unsaturated allyl resins, uncompounded
39079140	Unsaturated allyl resins, nesoi
39079150	Unsaturated polyesters, other than allyl resins in primary forms
39079920	Thermoplastic liquid crystal aromatic polyester copolymers
39079950	Other polyesters nesoi, saturated, in primary forms
39081000	Polyamide-6, -11, -12, -6,6, -6,9, -6,10 or -6,12 in primary form
39089020	Bis(4-amino-3-methylcyclohexyl)methaneisophthalic acid-laurolactam copolymer
39089070	Other polyamides in primary forms
39091000	Urea resins; thiourea resins
39092000	Melamine resins
39094000	Phenolic resins
39095010	Polyurethanes, elastomeric, in primary forms
39095020	Polyurethanes: cements, in primary forms
39095050	Polyurethanes, other than elastomeric or cements, in primary forms
39100000	Silicones in primary forms
39111000	Petroleum resins, coumarone, indene, or coumarone-indene resins and polyterpenes, in primary forms
39119010	Elastomeric polysulfides, polysulfones and other products specified in note 3 to chapter 39, nesoi, in primary forms
39119015	Specified carbodiimide or homopolymer with polyethylene thermoplastic goods
39119025	Thermoplastic polysulfides, polysulfones & oth products spec in note 3, chapt 39, cont aromatic monomer units or derived therefrom
39119035	Benzenamine; and hydrocarbon novolac cyanate ester
39119045	Thermosetting polysulfides, polysulfones & oth products spec in note 3, chapt 39, cont aromatic monomer units or derived therefrom
39119070	Chlorinated synthetic rubber
39119090	Polysulfides, polysulfones & other products specified in note 3 to chapter 39, nesoi
39121200	Cellulose acetates, nesoi, in primary forms, plasticized
39122000	Cellulose nitrates (including collodions), in primary forms
39123900	Cellulose ethers, other than carboxymethylcellulose and its salts, in primary forms
39129000	Cellulose and its chemical derivatives nesoi, in primary forms
39131000	Alginic acid, and its salts and esters, in primary forms
39139010	Chemical derivatives of natural rubber, nesoi, in primary forms
39139050	Natural polymers and modified natural polymers, nesoi, in primary forms
39140020	Cross-linked polyvinylbenzyltrimethylammonium chloride (Cholestyramine resin USP)
39140060	Ion-exchangers based on polymers of headings 3901 to 3913, in primary forms, nesoi
39161000	Monofilament with cross-section dimension over 1 mm, rods, sticks, profile shapes, at most surface-worked, of polymers of ethylene
39162000	Monofilament with cross-section dimension over 1 mm, rods, sticks, profile shapes, at most surface-worked, of polymers of vinyl chloride
39169010	Monofilament with cross-section dimension over 1 mm, rods, sticks, profile shapes, at most surface-worked, of acrylic polymers
39169030	Monafilament nesoi, of plastics, excluding ethylene, vinyl chloride and acrylic polymers
39169050	Rods, sticks and profile shapes, at most surface-worked, of plastics, nesoi
39172100	Tubes, pipes and hoses, rigid, of polymers of ethylene
39172200	Tubes, pipes and hoses, rigid, of polymers of propylene
39172300	Tubes, pipes and hoses, rigid, of polymers of vinyl chloride
39172900	Tubes, pipes and hoses, rigid, of other plastics nesoi
39173100	Flexible plastic tubes, pipes and hoses, having a minimum burst pressure of 276 MPa
39173200	Tubes, pipes and hoses, of plastics, other than rigid, not reinforced or otherwise combined with other materials, without fittings
39174000	Fittings of plastics, for plastic tubes, pipes and hoses, nesoi
39191010	Self-adhesive plates, sheets, other flat shapes, of plastics, in rolls n/o 20 cm wide, light-reflecting surface produced by glass grains
39191020	Self-adhesive plates, sheets, other flat shapes, of plastics, in rolls n/o 20 cm wide, not having a light-reflecting glass grain surface
39199010	Self-adhesive plates, sheets, other flat shapes, of plastics, light-reflecting surface produced by glass grains, nesoi
39199050	Self-adhesive plates, sheets, other flat shapes, of plastics, not having a light-reflecting surface produced by glass grains, nesoi
39201000	Nonadhesive plates, sheets, film, foil and strip, noncellular, not reinforced or combined with other materials, of polymers of ethylene
39202000	Nonadhesive plates, sheets, film, foil and strip, noncellular, not reinforced or combined with other materials, of polymers of propylene
39203000	Nonadhesive plates, sheets, film, foil and strip, noncellular, not reinforced or combined with other materials, of polymers of styrene
39204310	Nonadhesive plates/sheets/film/foil/strip made imitation of patent leather, of vinyl chloride polymers, not less 6% plasticizers
39204350	Nonadhesive plate/sheet/film/foil/strip, noncellular, not comb w/other materials, of vinyl chloride polymers, not less 6% plasticizer, nesoi
39204900	Nonadhesive plates, sheets, film, foil, strip, noncellular, not combined w/other materials, of polymers of vinyl chloride, < 6% plasticizers
39205110	Nonadhesive plates, sheets, film, foil and strip, noncellular, not combined with other materials, of polymethyl methacrylate, flexible
39205150	Nonadhesive plates, sheets, film, foil and strip, noncellular, not combined with other materials, of polymethyl methacrylate, not flexible
39205910	Nonadhesive plates,sheets, film, foil and strip, noncellular, not combined with other materials, of acrylic polymers, flexible, nesoi
39205940	Transparent sheeting containing 30% or more by weight of lead
39205980	Plates, sheets, film, etc, noncellular, not reinforced, laminated, combined, of other acrylic polymers, nesoi
39206100	Nonadhesive plates, sheets, film, foil and strip, noncellular, not combined with other materials, of polycarbonates
39206200	Nonadhesive plates, sheets, film, foil and strip, noncellular, not combined with other materials, of polyethylene terephthalate
39206310	Nonadhesive plates, sheets, film, foil and strip, noncellular, not combined with other materials, of unsaturated polyesters, flexible
39206320	Nonadhesive plates, sheets, film, foil and strip, noncellular, not combined with other materials, of unsaturated polyesters, not flexible
39206900	Nonadhesive plates, sheets, film, foil and strip, noncellular, not combined with other materials, of polyesters, nesoi
39207100	Nonadhesive plates, sheets, film, foil and strip, noncellular, not combined with other materials, of regenerated cellulose
39207300	Nonadhesive plates, sheets, film, foil and strip, noncellular, not combined with other materials, of cellulose acetate
39207905	Nonadhesive plates, sheets, film, foil and strip, noncellular, not combined with other materials, of vulcanized fiber
39207910	Nonadhesive films, strips, sheets, noncellular, not combined with other materials, of other cellulose derivatives nesoi, n/o 0076 mm thick
39207950	Nonadhesive plates, sheets, film, foil and strip, noncellular, not combined with other materials, of cellulose derivatives, nesoi
39209100	Nonadhesive plates, sheets, film, foil and strip, noncellular, not combined with other materials, of polyvinyl butyral
39209200	Nonadhesive plates, sheets, film, foil and strip, noncellular, not combined with other materials, of polyamides
39209300	Nonadhesive plates, sheets, film, foil and strip, noncellular, not combined with other materials, of amino-resins
39209400	Nonadhesive plates, sheets, film, foil and strip, noncellular, not combined with other materials, of phenolic resins
39209910	Nonadhesive film, noncellular, not combined with other materials, of plastics nesoi, flexible, over 0152mm thick, not in rolls
39209920	Nonadhesive film, strips and sheets, noncellular, not combined with other materials, of plastics nesoi, flexible
39209950	Nonadhesive plates, sheets, film, foil and strip, noncellular, not combined with other materials, of plastics, nesoi
39211100	Nonadhesive plates, sheets, film, foil and strip, cellular, of polymers of styrene
39211211	Nonadhesive plates, sheets, film, foil, strip, cellular, of polymers of vinyl chloride, with man-made textile fibers, over 70% plastics
39211215	Nonadhesive plates, sheets, film, foil, strip, cellular, of polymers of vinyl chloride, with man-made textile fibers, n/o 70% plastics
39211219	Nonadhesive plates, sheets, film, foil and strip, cellular, of polymers of vinyl chloride, combined with textile materials, nesoi
39211250	Nonadhesiveplates, sheets, film, foil and strip, cellular, of polymers of vinyl chloride, not combined with textile materials
39211311	Nonadhesive plates, sheets, film, foil and strip, cellular, of polyurethanes, with man-made textile fibers, over 70% plastics
39211315	Nonadhesive plates, sheets, film, foil and strip, cellular, of polyurethanes, with man-made textile fibers, not over 70 percent plastics
39211319	Nonadhesive plates, sheets, film, foil and strip, cellular, of polyurethanes, combined with textile materials nesoi
39211350	Nonadhesive plates, sheets, film, foil and strip, cellular,of polyurethanes, not combined with textile materials, nesoi
39211400	Nonadhesive plates, sheets, film, foil and strip, cellular, of regenerated cellulose
39211900	Nonadhesive plates, sheets, film, foil and strip, cellular, of plastics nesoi
39219011	Nonadhesive plates, sheets, film, foil, strip, of noncellular plastics combined with man-made fibers, n/o 1492 kg/sq m, over 70% plastics
39219015	Nonadhesive plates, sheets, film, foil, strip, of noncellular plastics combined with man-made fibers, n/o 1492 kg/sq m, n/o 70% plastics
39219019	Nonadhesive plates, sheets, film, foil and strip, of noncellular plastics combined with textile materials, nesoi, not over 1492 kg/sq m
39219021	Nonadhesive plates, sheets, film, foil and strip, of noncellular plastics combined with cotton, over 1492 kg/sq m
39219025	Nonadhesive plates, sheets, film, foil and strip, of noncellular plastics combined with man-made fibers, over 1492 kg/sq m
39219029	Nonadhesive plates, sheets, film, foil and strip, of noncellular plastics combined with textile materials, nesoi, over 1492 kg/sq m
39219040	Nonadhesive plates, sheets, film, foil and strip, flexible, nesoi, of noncellular plastics
39219050	Nonadhesive plates, sheets, film, foil and strip, nonflexible, nesoi, of noncellular plastics

Chinese proposed tariffs

HTS code	Product
27040010	Coke and semi-coke
27040090	Carbon
27050000	Gas, water gas, furnace gas and similar gases
27074000	Naphthalene
27075000	250°C distilled aromatics ≥65% of other aromatic mixtures
27079990	Other aromatic products such as distilled coal tar
27081000	Tar asphalt
27082000	Tar asphalt coke
27090000	Petroleum oils and oils obtained from bituminous minerals, crude
27101210	Vehicle gasoline and aviation gasoline
27101220	Naphtha
27101230	Rubber solvent oil, paint solvent oil, extraction solvent oil
27101291	Nonene
27101299	Other light oil fraction products
27101911	Aviation kerosene
27101912	Lamp kerosene
27101919	Other kerosene fraction products
27101922	Fuel oil No 5, No 7
27101923	Diesel
27101929	Other fuel oil
27101991	lubricating oil
27101992	Grease
27101993	Lubricant base oil
27101994	Liquid paraffin and heavy liquid paraffin
27101999	Other heavy oil and heavy oil products
27102000	Product oil containing biodiesel and products based on it
27109100	Polychlorinated biphenyls (PCBs), PCT (PCTs), Polybrominated biphenyls (PBBs), waste oil
27109900	Other waste oil
27111200	Liquid propane
27111310	Liquefied butane infused cigarette lighter
27111390	Other liquefied butane
27111910	Other liquefied fuels infused with cigarette lighters
27111990	Other LPG and hydrocarbon gases
27112100	Gaseous natural gas
27112900	Gaseous petroleum gas and other hydrocarbon gases
27121000	Vaseline
27122000	Paraffin, oil content by weight <0.75%
27129010	Microcrystalline wax
27129090	Other mineral waxes and similar products
27131110	Sulfur content is less than3% of uncalcined petroleum coke
27131190	Other uncalcined petroleum coke
27131210	Sulfur content is less than 0.8% of calcined petroleum coke
27131290	Other calcined petroleum coke
27132000	asphalt
27139000	Other oil residues
27141000	Asphalt shale, oil shale and tar sand
27149010	Natural asphalt (Asphalt)
27149020	Emulsified asphalt
27149090	Asphalt rock
27150000	Asphalt mixture based on natural asphalt, etc.
34031900	Mineral oil 70% of lubricant
34039900	Oil-free or oil extracted from bituminous minerals
39011000	Polyethylene having a specific gravity of less than 0.94, in primary forms
39014090	Other ethylene alpha olefin copolymers with a specific gravity of less than 0.94
39019090	Other polymers of ethylene, in primary forms
39041090	Polymers of vinyl chloride or of other halogenated olefins, in primary forms
39069090	Other primary shape acrylic polymers
39072090	Other primary-shaped polyethers
39073000	Primary shape epoxy
39074000	Primary shape polycarbonate
39079999	Polyacetals, other polyethers and epoxide resins, in primary forms; polycarbonates, alkyd resins, polyallyl esters and other polyesters, in primary forms  (3)
39081011	Polyamide-6,6
39089010	Aromatic polyamides and their copolymers
39089020	Semi-aromatic polyamides and their copolymers
39089090	Other polyamides in primary form
39100000	silicones in primary form
39119000	Petroleum resins, coumaroneindene resins, polyterpenes, polysulphides, polysulphones and other products specified in Note 2 to this Chapter, not elsewhere specified or included, in primary forms  (6)
39121100	Primary-shaped, unplasticized cellulose acetate
39199090	Other self-adhesive plastic plates, sheets, films and other materials
39201090	Other vinyl polymer boards, sheets, films, foils, etc.
39206200	Plates, sheets, film, foil and strip, of poly(ethylene terephthalate), noncellular and not reinforced, laminated, supported or similarly combined with other materials
39209990	Other plates, sheets, film, foil and strip, of plastics, noncellular and not reinforced, laminated, supported or similarly combined with other materials  (3)
39219090	Other Plastic Plates, Sheets, Films, Foil and Strips
39269090	Other plastic products
40023990	Halogenated butyl rubber sheet, sheet, tape

Additional reporting by David Haydon, Bill Bowen, Lucas Hall, Amanda Hay and Steven McGinn