What impacts will the joint statement of the China-Us Geneva Economic and Trade Talks have on the plastic raw material market?

　　On the afternoon of May 12, 2025, China and the United States jointly issued the "Geneva Joint Economic and Trade Statement", and both sides committed to taking the following measures before May 14, 2025:

　　The United States will (1) amend the AD valorem tariffs imposed on Chinese goods (including goods from the Hong Kong Special Administrative Region and the Macao Special Administrative Region) as stipulated in Executive Order 14257 of April 2, 2025. Among them, the 24% tariff will be suspended for the initial 90 days, while retaining the imposition of the remaining 10% tariff on these goods in accordance with the provisions of this executive order. (2) Abolish the additional tariffs imposed on these goods in accordance with Executive Orders No. 14259 of April 8, 2025 and No. 14266 of April 9, 2025.

　　China will (1) correspondingly revise the AD valorem tariffs imposed on US goods as stipulated in the Tariff Commission's Announcement No. 4 of 2025. Among them, the 24% tariff will be suspended for the initial 90 days, while the remaining 10% tariff will be retained for these goods, and the additional tariffs imposed on these goods in accordance with the Tariff Commission's Announcements No. 5 and No. 6 of 2025 will be cancelled; (2) Take necessary measures to suspend or cancel non-tariff countermeasures against the United States as of April 2, 2025. Most importantly, given China's positive stance, subsequent countries may use this as a benchmark to negotiate with the United States, thereby gradually restoring the trade flow.

　　According to Jinfengchuang's analysis, the new changes in tariffs have the following impacts on the plastic raw material market and downstream products:

　　PE: The tariff negotiations between China and the United States have made substantial progress, which has formed a certain positive driving force for the PE market. From the market perspective, LLDPE futures opened and continued to rise during the day, with the main contract maintaining a relatively strong and volatile pattern. In the spot market, although prices have not seen a significant increase yet, the trading atmosphere in the market has improved, especially the transaction volume of low-end supplies has increased, reflecting a stronger willingness to replenish inventories in the market. The impact of the progress of this negotiation on the polyethylene market is mainly reflected in two aspects: First, through the transmission of crude oil costs, it forms a bottom support for polyethylene prices; Second, at the demand expectation level, as the trade relations between China and the United States ease, the export demand for plastic products from China is expected to gradually recover. Although plastic product exports still face pressure under the current tariff levels, positive consultation signals have boosted market confidence. It is worth noting that some market participants are adopting a wait-and-see attitude towards the second round of negotiations. It is recommended to keep an eye on the progress of the negotiations and the implementation of specific terms.

　　PP: The adjustment of tariffs will significantly improve the export environment of Chinese plastic products to the United States in the short term, promoting the return of orders and cost optimization. Previously, most of China's plastic product exports to the United States were subject to a 145% tariff, which led to a 50% to 100% increase in terminal selling prices. The high tariffs once caused a 30% to 50% decline in China's plastic product export orders to the United States, and some enterprises even suspended shipments. In addition, the high selling prices have led to the loss of orders to Southeast Asian countries. This reduction in tax rates will directly lower export costs and restore the price advantage of Chinese plastic products in the US market. After the tax rate reduction, the purchasing intention of US importers may recover, especially in areas such as daily necessities and packaging materials that rely on China's supply chain.

　　In response to the survey of practitioners on the adjustment of tariffs, 80% of plastic film enterprises hold an optimistic attitude towards the market, believing that the market price will stabilize and consolidate in the short term, and the market recovery will take a process. They are optimistic in the long term. Twenty percent believe that market confidence is insufficient in the short term, but the support of rigid demand still exists, and they expect prices to stabilize and consolidate.

　　For daily necessities enterprises, 70% of the factories stated that there is no change in orders for the time being, but the mindset of practitioners has improved, and they are looking forward to the implementation of export orders. Due to the significant decline in the price of homopolymer injection-molded polypropylene in the early stage, after the change in tariff policies, daily necessities enterprises have maintained a positive attitude towards raw material procurement, and the price of homopolymer injection-molded polypropylene may stop falling.

　　PVC In 2024, China's total export volume of PVC powder was approximately 2.6175 million tons. The top five trading partners were India, Vietnam, Thailand, Nigeria and Uzbekistan. The main export countries and regions were India, Southeast Asia and Africa, etc. The export volume to the United States was not large, accounting for only 0.0028%. Therefore, the imposition of additional tariffs has little impact on the export of Chinese PVC powder. However, from the statistics of PVC product exports, it can be seen that a certain share is exported to Europe and America