Chemicals
According to new data, chemical distributors in the US would be forced to deal with a $1.277 billion cost increase if the federal government moves ahead with a third set of tariffs on China. If the tariffs are enacted, over $200 billion worth of products imported from China will have a 25% tariff imposed.
In 2017, the US imported $5.109 billion in chemicals and polymers from China, Macau and Hong Kong; future imports would be affected by the potential new tariffs. Chemicals and polymers imported from China account for 9% of total US imports for those types of products. After deducting costs for freight and insurance, the product value of the imports drops 4.3% to $4.857 billion. If the 25% is applied to this figure, that would reflect a price increase of $1.214 billion, with the costs for the transportation margin raising the price an additional $1.277 billion for chemical distributors.
If evenly spread throughout the market, the tariff cost would also drive up the price of chemicals by 5.3%. The rise in prices would likely affect demand, with sales estimated to potentially decline over 7.22 million tons, which, for chemical distributors, would translate to a 12% drop in sales. The effects of this decline in demand would be vast, even affecting staffing of truck drivers, clerks and warehouse staff. Over 5,900 jobs may be lost for chemical distributors, and this figure may rise when including businesses that support chemical distributors.
