US polyethylene (PE) traders are concerned that retaliatory tariffs announced this week by China and being considered by the European Union will close the door to two of the biggest markets for US resin exports.
China announced today it will impose a 34pc tariff on all imports from the US from 10 April, while the EU is in the process of finalizing countermeasures this week, all in response to widespread tariffs announced by US president Donald Trump on 2 April.
"This closes off China," said one US export trader. "And it looks like a full stop in Europe too."
The US exported 2.4mn t of PE to China in 2024, representing 16.8pc of total US PE exports, according to data from Global Trade Tracker. Exports to the EU totaled 2.26mn t, representing 15pc of all US exports.
US PE exports in 2024 totaled 14.2mn t, with exports representing 47pc of total sales last year.
During the previous Trump administration, China provided waivers for certain tariffs, including on some PE grades. Some market participants have said that may be possible again, while others have said they see it as less likely, as China has become more self-sufficient, and has other alternative suppliers, such as the Middle East.
"(China) is in a better position to impose tariffs on PE today than they were in 2018," said one North American PE producer.
It will be difficult for US producers to make up for the loss of market share in China and the EU, which could result in producers needing to slow operating rates.
For now, markets in Africa, Latin America and southeast Asia, remain open for US material, but traders are concerned that other top trading partners could also retaliate against the US, closing off additional markets.
"There are not enough places to go with this stuff," the trader said.
With limited export opportunities, the North American PE producer agreed that production would likely need to slow to keep material from backing up in the domestic market and causing domestic prices to fall.
"The last time we saw tariff action from China, there was an impact on the domestic market," the producer said. "Pricing went down."
For this week, US PE export pricing has held fairly steady as the market absorbs the tariff news. But market participants said they believe prices could move down in the coming weeks if production is not slowed.
