List 4 Tariffs Threaten Chemicals Investment

American Chemistry Council Testifies on Section 301

Uncertainty caused by the U.S. government's “unpredictable and often conflicting tariff” action is expectted to impact new chemical industry investment in the country, according to the American Chemistry Council.
The independent industry association testified against the inclusion of key goods under the White House’s Section 301 Tariffs on China. Speaking at the Office of the U.S. Trade Representative public hearing, representatives of the ACC called for moderation.
“ACC holds the position that a prolonged trade war between the United States and China – in which chemicals being subjected to higher tariffs becomes a fixture, not an exception – could reverse the fortune of the U.S. chemical manufacturing sector,” a spokesperson for the ACC said.

HTS Code Review
Highlighting an estimated US$11 billion in chemicals and plastics imports from China that have been added to List 4 as subject to tariffs, the ACC called for the administration to get back to the negotiating table.

“With regard to proposed List 4, we respectfully urge the Section 301 Committee to remove, at a minimum, the 214 eight-digit U.S. Harmonized Tariff System (HTS) codes for chemicals and Plastics,” the ACC states.

The association estimates that if the full tariffs were to come into effect, the total value of U.S. chemicals and plastics imports from China subject to tariffs across all four lists would be US$26.4 billion, amounting to the “biggest tax increase that U.S. chemical manufacturers have ever experienced.”

Shale Gas Impacts

The timing of the recent U.S.-China trade war is seen as particularly harmful due to the nascent stage of the domestic shale gas industry, which ACC states gives U.S. chemicals manufacturers an “unprecedented competitive advantage” in producing high-demand chemistries at low cost and exporting them around the globe.
“For U.S. chemicals manufacturers, a prolonged trade war with China could cause the gift of the shale gas revolution to whither and fade – significantly undermining our industry’s global competitive advantage,” the ACC emphasises.

Based in Washington, D.C., the ACC represents a range of companies engaged in the business of chemistry through member engagement, political advocacy, communications and scientific research.
“Tariff elimination for chemicals must lead to the lowest possible bound rates at the WTO and the avoidance of additional duties on
top of applied duties. With this, we urge the Administration to lead the world into a new era of fairer, broadly beneficial global trade and investment,” the ACC concluded.