China to Impose Tariffs on U.S.-Origin PC

On April 4, the America announced a list of products and proposed adding tariffs of 25% on 1,333 Chinese-made products worth about 50 billion dollars. This action has gravely violated fundamental principles and values of the WTO. It not only violates China’s legitimate rights and interests but also threatens our development interests.

Approved by the state council, Tariff Commission of the State Council decided to add a tariff of 25 percent to 106 goods originating in the America across 14 categories, such as soybeans, automobiles and chemicals, according to China’s rights and obligations under the World Trade Organization as well as relevant provisions of Foreign Trade Law of the People's Republic of China and Import and Export Tariff Regulations of the People's Republic of China. PC is covered in the 106 products.

The volume of PC imported from the America ranks 7th or about 8% in the 2017 overall volume.

South Korea, Taiwan province and Thailand are the main sources for China’s imported PC. In recent years, the PC volume imported from the America remained 100-150kt, and accounted for 7%-11% in the overall imported volume. Thereinto, the volume of 103kt in 2017, which accounts for 7.5%, was the lowest in recent years.

In 2017, the main trade mode for PC imported from the America was processing trade with imported materials, which accounts for 83%, and general trade only accounts for 5%.

As for the customs, Guangzhou customs accounts for 69%. There are production bases of Saudi Basic Industry Corporation (SABIC) and Covestro in South China, and there also distribute many production plants such as modification, alloy, plates, electron, electrical equipment, hardware, toy, etc. In 2017, the import volume in South China was 717kt, up 9.8% Y-O-Y.

At present, Covestro and SABIC own enormous PC capacities. Covestro Polymers (China) plans to expand the capacity to 600kt/a; SABIC’s project with planned capacity of 260kt/a in Tianjin will be advanced gradually. China’s PC capacity will increase further in 2018 and 2019. At the time when the domestic PC market concerns the keen competition of low-end goods, the production transfer of some old companies mitigates the imported demand for high-end goods.