China trade war risks thousands of chemical industry jobs, billions of dollars

[Elderberry]

Houston Chronicle by  Marissa Luck May 10, 2019

The Gulf Coast petrochemical industry, already bruised by trade tensions with China, faces higher costs, shrinking profits and tougher market access from the new round of tariffs imposed by the Trump administration, putting thousands of American jobs and billions of dollars in capital investments at risk if the trade war with China escalates.

Energy and chemical companies have poured billions of dollars into building petrochemical plants to take advantage of region’s cheap supplies of natural gas and access to international markets through the Houston Ship Channel. Many of those huge investment decisions were based on the expectation that Chinese demand for chemicals would swell.

But on Friday, the United States increased tariffs from 10 percent to 25 percent on $200 billion worth of Chinese goods and China promised it would retaliate. Petrochemical companies now face the possibility that the Chinese demand on which they planned could evaporate, leading to rising supplies of global and falling prices.

Already American chemical companies, which employ 68,000 people in Texas, have watched profits stumble as the trade conflict has depressed prices across the global chemical market, forced American chemical producers to find other buyers and increased steel costs needed for huge plant expansions.

All this is undermining the return on investment on the $140 billion worth of petrochemical projects on the Gulf Coast, which executives could cause companies to hesitate before expanding again or building new plants here.

“When the tariffs rates hit … some of the investments might get stalled, the hiring might slow or might not happen at all. There could be job loss depending on the situation,” said Ed Brzytwa, director of international trade at American Chemistry Council, a trade group that represents chemical companies. “A 25 percent tariff rate is serious business.”

Overtime, Chinese retaliatory tariffs on U.S. exports could lead to job losses of 8,000 American chemical sector workers, according to the American Chemistry Council. Up to 46,000 people who work in the companies that provide goods and services to the chemical companies could see jobs or wages adversely affected by the tariffs, the trade group said.

More: https://www.houstonchronicle.com/business/energy/article/China-trade-war-risks-thousands-of-chemical-13837053.php

[skeeter]

How many US jobs are lost because of IP theft? Predatory trade practices? Loss of capital?

[IsailedawayfromFR]

If these investments were indeed made with the expectation Chinese demand would continue to swell, I submit it was improper planning by those companies.

Only fools wade into investments in which they lack control, or do not plan adequately for alternative scenarios.

[TomSea]

A number of analysts have said over the short term, the trade war may cause grief but it still may be necessary to do over the long run.

Marco Rubio
‏Verified account @marcorubio

I know it’s hard for some people to not be automatically against anything @POTUS does. But he is doing right thing on #China

Doing what both R & D Presidents before him didn’t have the guts to do

We need to support him on China not undermine him just to score political points

Marco Rubio
‏Verified account @marcorubio

#China is threatening retaliation?

They already steal intellectual property, block U.S. companies from doing business in China & give massive government support to Chinese companies.

Anything else they do in retaliation will pale in comparison.

A trade war seems to be risky thing to do. we will see.

A miniature version of this is that we may see some steep increases, 40% or more,  on tomatoes over the short term and a "tomato war" with Mexico if no body posted on this.

Prepare for sticker shock. The U.S.-Mexico Tomato War is on
https://newfoodeconomy.org/tomato-suspension-agreement-mexico-tomatoes-treaty/

But aside from this with Mexico, it does seem a lot of people say we need to stand up to China.

[Absalom]

Man was created w/imperfection.
To improve, he has to change.
Will the Chinese cease cheating, lying and stealing?
That is the very essence of this matter.
Watch the sob stories multiply from 'capitalists' who
have little problem w/matters just the way they are.

[dfwgator]

Man was created w/imperfection.
To improve, he has to change.
Will the Chinese cease cheating, lying and stealing?
That is the very essence of this matter.
Watch the sob stories multiply from 'capitalists' who
have little problem w/matters just the way they are.

Communists were right about one thing,  Capitalists would gladly sell the rope that they'll eventually be hanged with.