ChemChina Unfazed by US Tariffs, Satellite Chemical Sees Cost Hike
ChemChina, a major Chinese chemical company, has stated that recent US tariff adjustments have had little impact on its extensive global business. The company operates in over 80 countries and regions, with a significant presence in 'Belt and Road' nations.
Satellite Chemical, another Chinese chemical firm, has assessed the situation differently. It believes that the 34% tariffs on ethylene imports to China will increase production costs by 3-5%. However, it also expects a reduction in imports to lead to a domestic supply gap, which could offset the tariff impact through increased product prices.
Financial analysts have suggested that while US tax increases may negatively affect chemical products, China's countermeasures could bring benefits. These include increased domestic price levels and the encouragement of alternative production methods like MTO (methanol-to-olefin).
US President Trump's tariff policy, which includes high tariffs on Chinese imports, currently at 145%, has hindered Chinese chemical exports to the US. Chinese news media reports that US scientific research could also be impacted due to increased prices of US scientific research equipment and supplies.
The overall impact of tariffs on the Chinese chemical industry is expected to be significant but not catastrophic. Exports to the US account for only about 10% of China's chemical exports and about 1% of its total chemical sales. China's domestic chemical value chains have also been developed to mitigate the effects. The Chinese government and industry have responded to US tariff policies primarily through trade negotiations, leading to temporary suspensions or modifications of reciprocal tariffs.
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