A new set of tariffs has been announced by the United States on Chinese goods including on waste paper and plastics.
If approved, these could come in to force at the end of August.
This proposed action will add a further 10% duty on Chinese products under 6,031 tariff subheadings and would have an annual trade value of approximately $200 billion.
The list of products is comprehensive and significant, including packaging products, paper and fibre, polymers and plastic products and also waste and scrap commodities.
While the export of recovered materials from China to the United States is not large, China has announced that it will once again take retaliatory measures. If China were to retaliate against US imports of waste paper, plus virgin fibre and polymers, this could result in a price rise for Chinese consumers of recovered and reprocessed commodities from the United States.
Therefore, commodity traders in the United States are likely to look to other Asian markets, increasing competition in those areas. At the same time, Chinese importers may be more inclined to look towards Europe and the UK for good quality materials.
The only certainty is ongoing instability.
What’s included in the new Tariff list?
A full tariff list is here. Below is a list of key items included.
- Waste, parings and scraps, of polymers of ethylene
- Waste, parings and scrap, of polymers of styrene
- Waste, parings and scrap, of polymers of vinyl chloride
- Waste, parings and scrap, of plastics, nesoi
- Other boxes, cases, crates and similar articles for the conveyance or packing of goods, of plastics
- Sacks and bags (including cones) for the conveyance or packing of goods, of polymers of ethylene
- Sacks and bags (including cones) for the conveyance or packing of goods, of plastics other than polymers of ethylene
- Carboys, bottles, flasks and similar articles for the conveyance or packing of goods, of plastics
- Reclaimed rubber in primary forms or in plates, sheets or strip
- Waste, parings and scrap of rubber (other than hard rubber) and powders and granules obtained therefrom
- Pulps of fibers derived from recovered (waste and scrap) paper or paperboard
- Waste and scrap of unbleached kraft paper or paperboard or of corrugated paper or paperboard
- Waste and scrap of other paper or paperboard, made mainly of bleached chemical pulp, not colored in the mass
- Waste and scrap of paper or paperboard made mainly of mechanical pulp (for example, newspapers, journals, and similar printed matter)
- Waste and scrap of paper or paperboard nesoi, including unsorted waste and scrap
- Newsprint, in rolls or sheets
Why’s this happening?
18 August 2017: the Office of the United States Trade Representative announced an investigation into the way that China was conducting its business, specifically with relation to technology transfer, intellectual property, and innovation.
6 April 2018: the result of the investigation found that ‘…practices of the Government of China covered in the investigation are unreasonable or discriminatory and burden or restrict U.S. commerce.’ It proposed a 25 per cent tariff on 1,333 product subheadings with a total value of $50 billion. A consultation period on the proposed actions followed.
15 June 2018: consultation period concluded and a determination was published to impose tariffs to 818 tariff subheadings with a value of $34 billion. Consultation continued on further tariffs with a value of $16 billion (this is ongoing). China responds immediately with equivalent tariffs.
16 June 2018: the Chinese government announced that it would impose an additional 25 per cent tariff on U.S. goods with a value of $50 billion, split into two groups corresponding the first of which would be immediately applied and account for $34 billion, with the remainder to be applied at a date to be determined.
6 July 2018: Both US and China tariffs enforced.
10 July 2018: commenting on the impact of these tariffs to date, a statement from the Office of the United States Trade Representative stated:
‘It has become apparent that U.S. action at this level is not sufficient to obtain the elimination of China’s acts, policies, and practices covered in the investigation. Accordingly, the Trade Representative is proposing to modify the action in this investigation by maintaining the original $34 billion action and the proposed $16 billion action, and by taking a further, supplemental action. The Trade Representative proposes an additional 10 percent ad valorem duty on products of China covered in the attached list of 6,031 tariff subheadings. The attached list has an annual trade value of approximately $200 billion.’
The new action will once again be subject to a consultation period, with written comments required by 17 August. A hearing on the consultation is scheduled for the end of August.
China announced that it would again take retaliatory action.