PLASTICS Economist Outlines Impact of China’s Duties on US Industrial PlasticsPLASTICS Economist Outlines Impact of China’s Duties on US Industrial Plastics

The People’s Republic of China is imposing provisional duties on imports of industrial plastics from the US, EU, Japan, and Taiwan following a months-long anti-dumping investigation.

Starting January 24, Chinese customs officials began collecting security deposits from companies that sell the affected products from the listed countries, according to the country’s Ministry of Commerce.

Perc Pineda, PhD, chief economist for the Plastics Industry Association (PLASTICS), pointed out that China has imposed provisional duties on products classified under the Import and Export Tariff of the People’s Republic of China (2023) codes 39071010 and 39071090. These products fall under HTS 390710 – polyacetals. Pineda noted that 39071010 refers to polyoxymethylene in primary forms, and 39071090 refers to other polyacetals in primary forms.

The Chinese government kicked off an investigation in May 2024, the same week the US increased tariffs on Chinese electric vehicles and the European Union launched its own trade investigation into certain Chinese steel imports. The nine-month investigation concluded just days before Donald Trump was inaugurated for his second term as US president, continuing his hard-line stance on trade that began during his first term.

Related:The Known Unknowns Confronting the Plastics Industry in 2025

According to the Ministry of Commerce, China imported about $409 million worth of polyacetal products from the US, Japan, Taiwan, and Germany between January and November of the previous year, based on customs data.

“The imposition of a 74.9% provisional duty on US polyacetal exports makes these materials uncompetitive in the Chinese market,” Pineda explained. “This levy, in the form of a security deposit paid to the Customs of the People’s Republic of China by the importer, significantly increases the cost burden. As a result, importing polyacetals from countries not subject to such high duties is both less cumbersome and less costly.”

Pineda noted that while provisional duties have also been imposed on EU and Asian countries, their rates are considerably lower: EU companies face a duty of 42.0%, Japanese companies face 43.7%, and other Taiwanese companies face 32.6%. This disparity places US exports at a clear disadvantage.

“Based on 2023 trade data, the ruling jeopardizes an estimated $663.8 million in polyoxymethylene and $50.8 million in other polyacetal imports into China from the US,” Pineda explained.

Moreover, Pineda pointed out that the broader implications for US manufacturers outside of raw material suppliers are harder to assess, as the provisional duties apply only to HTS codes 39071010 and 39071090.

“These measures do not extend to products or plastics containing polyacetals, such as electronics or automotive components,” he said. “Therefore, the impact on downstream trade remains uncertain.”

According to PLASTICS, China was the world’s largest importer of polyacetals in 2023, accounting for 25.1% of global imports by dollar value. While higher costs of imported materials may disadvantage Chinese manufacturers using polyacetals, other Asian countries collectively accounted for 37.2% of China’s polyacetal imports in 2023. Notable suppliers include South Korea, Thailand, Saudi Arabia, Malaysia, and Singapore.

In contrast, Pineda noted that the US contributed 13.6% to China’s polyacetal imports in 2023. With significant supply from other Asian nations, China is likely to maintain its manufacturing output of polyacetal-based products at competitive price points.

“The 74.9% provisional duty significantly hampers US competitiveness in the Chinese polyacetal market,” Pineda explained.

While the impact on US manufacturers’ downstream industries is unclear due to the limited scope of the ruling, Pineda emphasized that the competitive dynamics in the global polyacetal market underscore the challenges posed by these duties to US exporters.

“Given that these are provisional duties, their long-term effects on innovation would be purely speculative. PLASTICS will continue to monitor the situation,” Pineda concluded.

Meanwhile, Congress is poised to take action against China on the trade front, with legislators on Capitol Hill introducing a measure in the House that would rescind China’s permanent normal trade relations with the US. 

US Rep. John Moolenaar, R-MI, and US Rep. Tom Suozzi, D,-NY, introduced the Restoring Trade Fairness Act in the House, with companion legislation filed in the Senate by Sen. Tom Cotton, R-AR, and Sen. Jim Banks, R- IN. 

The proposed legislation would end annual recertification of the designation, and create a minimum 35% ad valorem (in proportion to the estimated value of the goods or transaction) tariff for non-strategic goods and a minimum 100% ad valorem tariff for all strategic goods.

Moolenaar said the bipartisan consensus demonstrates that both parties recognize the need to reset the country’s economic relationship with China is a big win for the US.

“Building on the tariff measures across three successive administrations, and in alignment with President Trump’s leadership through his new Executive Order, the Restoring Trade Fairness Act takes decisive action,” he said in a statement. 

Suozzi said the measure sends a message that China cannot receive preferential tariff treatment. 

“The Chinese Communist Party is engaging in unfair trade practices that devastate the American manufacturing industry’s ability to compete, contribute to the theft of American intellectual property, and allow goods made with forced Uyghur labor in Xinjiang to enter our supply chain,” he said in a statement.