Recently, the US government announced the imposition of so-called "reciprocal tariffs", causing global market turmoil and widespread concern in the international community. On April 10, the US government announced that the tax rate of "reciprocal tariffs" on Chinese goods exported to the US would be further increased to 125%.



Against the backdrop of current trade frictions, the upstream and downstream of the silicone industry present completely different development trends.
Tariff range and tax rate
The current round of tariff increases imposed by the United States is mainly aimed at silicone deep-processing products, such as silicone sealants, silicone rubber products, etc. Although primary polysiloxanes are exempted, deep-processing products have become the core target of the trade war due to their high technical added value and wide application fields.
Impact on US exports
Order transfer: Some US customers may turn to suppliers in Southeast Asia, India and other places, which may lead to a short-term decline in China's direct exports.
Increased re-export trade: Enterprises process and label exports through third places such as Vietnam and Malaysia to circumvent tariff barriers.
Decline in competitiveness of downstream finished products: Export orders for terminal products such as photovoltaic modules have decreased due to rising costs. In terms of electronic products, the U.S. Customs and Border Protection announced on the evening of April 11 that the federal government has agreed to exempt electronic products such as smartphones, computers, and chips from so-called "reciprocal tariffs", which may be less affected.
Industry response suggestions
Policy level: Promote industry associations to negotiate with the U.S. Trade Representative to strive for tariff exemptions for more products; use the "Belt and Road" policy to increase export subsidies and logistics support to Southeast Asia, the Middle East and other places.
Corporate strategy: Accelerate the development of products that meet international environmental standards and increase brand premiums; restructure the supply chain, set up processing bases in tariff depressions such as Vietnam and Mexico, and reduce the impact of trade barriers; risk management, hedge against raw material price fluctuations through futures tools, and establish multi-regional customers to disperse order risks.
Industry collaboration: Leading companies take the lead in integrating production capacity to avoid low-price competition; Joint financial institutions launch special loans to alleviate the financial pressure of small and medium-sized enterprises.
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