The US has slapped 25 per cent tariffs on $16 billion-worth of Chinese goods, including chemicals, but they are expected to have negligible impact on the plastics industry, says market analyst firm Wood Mackenzie.

Says principal analyst Ashish Chitalia, the US only imports 1.5 per cent of polymers, such as PE, PP, PVC and PS, from China and so the import duty will not have a significant effect. The more significant impact will be felt in the area of plastics pipes and tubes.

The duty takes effect on 23 August 2018 and buyers are already stocking their inventories to reduce the impact. If tariffs are sustained for the longer term, Chitalia expects an uncertain investment environment for petrochemical/plastics producing companies.

“Both China and the US have been investing multi-billion dollars in the petrochemical and plastics space in the last decade and are likely to continue doing so for the next decade. However, risk assessments are becoming increasingly challenging due to the uncertainty around the tariffs and their impact on commodity prices, logistics, supply chain and currencies,” concluded Chitalia.