WORLD Chemical companies warn of potential damages from tariffs

WORLD

Chemical companies warn of potential damages from tariffs

CGTN

02:54, August 26, 2018

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(Photo: CGTN)

A proposed tariff of 25 percent on $200 billion worth of Chinese imports will eventually damage US companies and consumers, with higher prices and limited choices, representatives from the chemical industry said at the public hearings on US 301 investigation. 

The list of $200 billion worth of Chinese products includes 16 billion US dollars' worth of chemical and plastics goods, according to data from the American Chemistry Council (ACC), an industry association. 

The new tariffs “would have a potentially irreparable impact on our industry’s economic structure and supply chain,” the ACC’s director of international trade, Ed Brzytwa, warned at the hearing, US Chemical & Engineering News reported on Thursday. 

Representatives from Chinese companies also attended the public hearing and argued that the implementation of tariffs will lead to a supply shortage in the US market and even potentially risk US consumers as they would have to resort to other alternatives. 

Choon Teo, chief scientific officer at Zhejiang Medicine Co. Ltd, asked the Section 301 Subcommittee to exclude certain natural food coloring products from the new list of proposed Section 301 tariffs. 

“Imposing tariffs on these products may cause Chinese suppliers to exit the market,” and then the previous duopoly by two European companies might return, according to the testimony Choon sent to CGTN. 

With the duopoly, price increases and product shortages, “this would not be beneficial to the US industry,” he said at the hearing, adding that these European producers’ facilities are old and prone to accidents, leading to potential risks for US consumers’ health. 

In addition to companies attending the public hearing, many chemical companies have submitted letters explaining the harm the tariffs would do to them and their customers.

One of them is chemical maker SNF Holding who has been importing quaternized dimethylaminoethyl acrylate from a sister company in China because of an industry-wide capacity shortage in the US.

SNF warned that the proposed tariff on this product, which is widely used to treat municipal drinking water, could raise the cost of water treatment by 20 percent, according to the Chemical & Engineering News report. 

“This particular tariff will not increase costs for the latest electronic gadget or luxury item. Instead, this tariff will increase costs for drinking water and waste treatment, a basic human necessity,” the report said, quoting SNF President John Pittman.

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