The U.S. chemicals industry, one of the country’s largest manufacturing industries, has experienced difficulties from the administration’s new tariff policy. The Trump administration has enacted $200 billion worth of tariffs on Chinese products, and China’s response to these tariffs has not been favorable to the chemicals industry.

Chemical Exports

The chemicals industry requires a lot of exports. Thus, trading patterns affect the industry dramatically. More than 800,000 U.S. citizens are employed in the chemicals industry. The industry contributes more than $800,000 billion annually to the U.S. economy. The Trump administration wants to bring new life into the manufacturing industry, but these tariffs are keeping manufacturers from growing. Yet, the administration has increased tariffs another 10%.

Chinese Products

The new tariffs affect 6,000 different Chinese products. Over 1,500 of those products are used in the chemicals industry. Major chemicals like ethylene glycol, ethylene propene, and acyclic hydrocarbons are just a few of the chemicals that these tariffs target.

Growth of Chemicals Industry

The chemicals industry has been a strong force in manufacturing in the recent past. Things like tax cuts, the shale gas revolution, and the strength of the pharmaceuticals industry have helped the chemicals industry explode in recent years. Yet, if the trade war continues, this growth is going to stall. The tariffs will affect supply chains, which, in turn, will make manufacturers less desirable on the global market. If this happens, U.S. workers will likely be cut.

The Ongoing Trade War

The problem with the ongoing trade war is that it separates the U.S. from economic powers who could be strong allies, increases the cost of manufacturing, and makes the U.S. chemicals market less appealing to consumers abroad. Together, this stagnates both economic growth and employment. The worst part is that these tariffs are in retaliation to China’s unfair trading policies, yet the chances of these tariffs succeeding in their goal is slim.

If the trade war continues, the Trump administration is going to hurt the very jobs that the administration is trying to create. If the sanctions had any real chance of convincing China to change their trading practices, they might be worth it. Unfortunately, China holds most of the cards right now. They have no real incentive to change. Thus, these tariffs do more harm than good.

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