Tar­iffs ‘a bad for­mula’ for chem­i­cals sec­tor

China Daily (Hong Kong) - - BUSINESS - By ZHENG XIN zhengxin@chi­nadaily.com.cn

Wor­ried about dis­rup­tions in global mar­kets from the Sino-US trade con­flict, the Amer­i­can Chem­istry Coun­cil’s CEO is call­ing on the Trump ad­min­is­tra­tion to back away from its uni­lat­eral im­ple­men­ta­tion of tar­iffs on prod­ucts from China and other coun­tries.

“The tar­iffs im­ple­mented by both coun­tries are harm­ing chem­i­cal man­u­fac­tur­ing in both China and the United States,” said Calvin Doo­ley, pres­i­dent and chief ex­ec­u­tive of­fi­cer of the Amer­i­can Chem­istry Coun­cil, dur­ing the ICCA -UN En­vi­ron­ment sym­po­sium on sound man­age­ment of chem­i­cals and waste and the cir­cu­lar econ­omy held in Chengdu, Sichuan prov­ince, on Thurs­day.

“The mem­ber com­pa­nies of the coun­cil are very strong sup­port­ers of free and fair trade and we have been work­ing with a coali­tion with man­u­fac­tur­ing and agri­cul­tural groups who share our con­cerns with the ad­min­is­tra­tion’s im­ple­men­ta­tion of tar­iffs.”

The sec­ond round of US and China tar­iffs, each com­pris­ing 25 per­cent on $16 bil­lion in im­ports, go­ing into ef­fect on Aug 23, is ex­pected to se­ri­ously hit US com­mod­ity chem­i­cal ex­ports to China.

Ac­cord­ing to John Richard­son, se­nior Asia con­sul­tant at ICIS, it is es­ti­mated that China will ac­count for 51 per­cent of global net high den­sity PE and lin­ear low den­sity PE net im­ports across the ma­jor deficit re­gions and coun­tries in 2018-25.

This means that over the shorter term, this year and 2019, China will have a sim­i­larly dom­i­nant role as the world’s biggest im­porter, and it is math­e­mat­i­cally im­pos­si­ble for the US to en­joy big in­creases in pro­duc­tion with­out ex­port­ing to China, he said.

Doo­ley said the chem­i­cal in­dus­try is the coun­try’s lead­ing ex­porter and chem­i­cal in­dus­try ex­ports ac­count for more than 10 per­cent of all the coun­try’s ex­ports.

“We have a cur­rent net pos­i­tive trade bal­ance of $33 bil­lion, and with our in­creased in­vest­ment and chem­i­cal man­u­fac­tur­ing in the US, the trade bal­ance is ex­pected to in­crease $75 bil­lion by 2025,” he said.

“The coun­cil has been en­gag­ing in bi­lat­eral (and) mul­ti­lat­eral ne­go­ti­a­tion to ex­press our con­cerns about mar­ket dis­or­der ...”

The “cir­cu­lar econ­omy” de­scribes a business phi­los­o­phy in which prod­ucts are reused, de­sign­ing out waste and min­i­miz­ing the neg­a­tive im­pact of man­u­fac­tur­ing on so­ci­ety. Ac­cord­ing to Doo­ley, China has been ad­vanc­ing the con­cept amid its im­ple­men­ta­tion of stricter en­vi­ron­men­tal re­stric­tions, and the Chi­nese gov­ern­ment’s ef­forts in ad­vanc­ing a cir­cu­lar econ­omy in re­cent years have been sub­stan­tial, with sound and in­no­va­tive reg­u­la­tions.

Marco Mensink, coun­cil sec­re­tary of the In­ter­na­tional Coun­cil of Chem­i­cal As­so­ci­a­tions, echoed Doo­ley’s com­ments, say­ing the cir­cu­lar econ­omy is a key op­por­tu­nity for China, and it is a business op­por­tu­nity for both multi­na­tional cor­po­ra­tions and do­mes­tic com­pa­nies.

Euro­pean and other Western com­pa­nies will lead in the be­gin­ning and China will par­tic­i­pate through joint ven­tures, he said.

“The waste treat­ment tech­nol­ogy is de­vel­op­ing fast (and) many do­mes­tic com­pa­nies will fol­low soon,” he told China Daily dur­ing the sym­po­sium hosted by the ICCA and UN En­vi­ron­ment, and sup­ported by the China Petroleum and Chem­i­cal In­dus­try Fed­er­a­tion.

In ad­di­tion to waste man­age­ment, the lo­gis­tics to col­lect and sort the waste and use it in in­dus­try plays an equally im­por­tant role, as those com­pa­nies know the coun­try best and get the cir­cu­lar econ­omy run­ning.

BLOOMBERG

An em­ployee per­forms main­te­nance on a chem­i­cal mix­ing ma­chine in an East­man Ko­dak Corp film man­u­fac­tur­ing fa­cil­ity in Rochester, New York.

Calvin Doo­ley, pres­i­dent and chief ex­ec­u­tive of­fi­cer of the Amer­i­can Chem­istry Coun­cil

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