Thermoplastic Polymers: PPS Resin and 220% China Tariff – What you need to know
December 9th, 2020
Quick View Summary
- Depending on the country you are shipping from anti-dumping tariffs between 23.9% to 220.9% are being applied to PPS resin shipments imported into China.
- PPS thermoplastic polymer shipped from the USA has the highest tariff rates at 220.9%.
- Specifically, it is smaller shipments send via FedEx or other freight forwarders that are being targeted by these punitive anti-dumping tariffs.
- The tariff will be applied to both the cost of goods and the freight cost. Example: if PPS resin value is $500 and shipping cost is $500 then the 220% tariff is applied to your $1000 shipment, bringing the total cost to $3200.
- When buying PPS resin in China, directly through authorized and certified resin suppliers, the tariff is NOT being applied and good PPS pricing is available. The main reason these anti-dumping tariffs are in place is to protect the authorized and certified resin suppliers.
- These tariffs are a little bit trade war and a lot of lobbying by foreign big brand resin suppliers looking to protect their interests.
- There are other popular thermoplastic polymers that are currently being targeted for high tariffs or are under review for near future anti-dumping tariffs.
- Jade Molds has tried and tested solutions to combat these high tariff costs.
Continue reading for further details or [email protected] to discuss your needs.
It is not uncommon for customers to ship a bag or a few bags of specialty thermoplastic polymers (like PPS resin) to their China mold makers for the purpose of running mold trials. Why? There are a few reasons.
- Peace of mind: When you ship a highly specific branded resin to your China mold maker via FedEx or other freight forwarder you remove the chance of your China mold maker using a cheaper inferior substitute resin during your mold trial and lying to you about the resin they have used to produce your test parts.
- Necessity: A China mold maker might tell you that they cannot get the specific branded resin you requested and ask you to supply the resin for mold trials. This might be true for your particular supplier, this might be laziness from the supplier, it doesn’t really matter. The point it they put the burden on you to supply the resin you have specified to run your mold trial.
- Cost: When it comes to mold trials some big brand thermoplastic polymers in China cost more per KG and/or the MOQ is too large to justify the mold maker investing in your specialty resin for a single mold trial. So, the easy solution is to send your chosen resin to them directly by FedEx.
So, shipping a few bags of thermoplastic polymers like PPS is not a problem? Right?
Up until very recently, there were zero problems shipping small quantities of PPS to China, but now it is a problem. Call it a trade war. Call it outside market forces lobbying for their own interests. Call it a bit of both (we will get into that below). What matters is that right now there is up to a 220.9% anti-dumping tariff on PPS coming into China when shipped from the USA. From different countries, we are seeing tariffs range from 23.9% to 220.9%. As big as that surprise may be to you, there is more.
The tariff will be applied to the shipping cost as well, not just the resin cost. That sounds crazy, but during a trade war, there is a lot of nonsensicalness about. Further, the tariff price can be adjusted to reflect the domestically listed price of the branded resin. If you claimed $4 a KG on your import paperwork but it sells for $6 a KG in China, your 220.9% tariff cost will be on the $6 a KG China domestic price plus your shipping costs.
Look at it this way. If you ship PPS worth $500 and your shipping cost is $500. That is $1000. Your overly inflated anti-dumping tariff could be as high as $2200 taking your total resin cost for shipping a couple of bags of PPS to your China mold maker to $3200. It is a problem right now. It is important to understand what is behind these punitive tariffs. It is important to know what potential workarounds there are for you.
On the surface, it is easy to think that this is simply part of the ongoing trade war with the USA, but it is not that simple. For sure the trade war is playing a part. But it is also noteworthy that high anti-dumping tariffs are also being applied on PPS resin being shipped into China from Japan and Korea as examples of other countries affected.
What is really driving these high PPS resin anti-dumping tariffs are the foreign big brand thermoplastic polymer companies who have been lobbying the China government for these highly punitive tariffs. Specifically, to stop small quantities of their resins being shipped into China via FedEx or other freight forwarders. They want China mold makers to buy resin from their official supplier partners in China. They are protecting their partners, protecting the domestic price, and protecting their ability to sell larger quantities of their highly specific branded resin in China.
That said, there are a couple of KEY points to stress about branded PPS resin in China.
- This does not mean that the cost of PPS resin in China just jumped by 220% because of tariffs. This means that individual small PPS resin shipments are being targeted by customs.
- Your mold maker can still buy highly specific branded PPS resin from legitimate authorized partner resin suppliers in China, at decent market rates.
- Good mold makers can almost always buy low quantities of resin from legitimate authorized resin suppliers. But, sometimes rarely used specialty resins will be out of stock or not available unless you are willing to order the MOQ.
At Jade Molds we have straight forward workarounds for avoiding these high tariffs. We do not do workarounds; we just do it the right way.
- In China, we only buy resin from authorized resin suppliers. The partner suppliers that have been designated as official partners by the big brand thermoplastic polymer companies. Never from third party suppliers or unverifiable resin markets (which many China mold makers buy from). When we buy from authorized dealers in China, the highly specific resin you have chosen is exactly the same as the resin you are buying in your home country and shipping to us. The entire point of these punitive tariffs is to protect the domestic authorized China resin suppliers who are selling legit resin. By and large, these new tariffs DO NOT affect our ability to source and buy PPS resin at competitive price points in China.
- In China, we can and regularly do buy small quantities of specialty resin from authorized suppliers for mold trials. It generally is not a problem for us unless the resin is very rarely used, which may result in the resin being out of stock.
- When a resin is out of stock, we can find you a branded substitute resin that will be suitable for your mold trial, in the vast majority of cases. NOTE: You cannot trust that because an authorized China resin supplier says online that the resin is in stock, that it is in fact in stock. You need to go to the source and verify. That is part of Jade’s service. It is one example of how our Western team on the ground in China can help you.
- With these current punitive tariffs in place, our approach is to be more proactive with our customers to ensure we can secure the exact resin needed for an upcoming mold trial early in the mold making process or at minimum have a very close substitute picked out ready to go. Simply put, due to these new tariffs we will be having a more serious conversation about your resin needs for mold trials earlier in the project timeline.
- Another option when the resin MOQ is too high for a mold trial is to have us run some bridge production for you that ships at the same time as your mold. Shipping production parts with your mold is something that we already regularly do for customers. It is a good option to consider.
At the end of the day, the days of shipping a small quality of branded specialty resin by FedEx are coming to an end. These tariffs will not stop with PPS. Check out these links for some other thermoplastic polymers that are currently classified as anti-dumping with high tariffs in place or high tariffs being considered for the near future.
PPE, PPO, PVC, Nylon 6, and other resins are referenced above in these Chinese links. If you scroll down after clicking the links, you will recognize Western suppliers’ names in English as well as references to English named polymers.
NOTE: you may have recently gotten away with shipping in PPS or another thermoplastic polymer without getting hit with a high tariff. If so, do not count on this continuing. Some of these tariffs have been on the books for a couple of months but are only now coming to light and being enforced heavily.
There are of course underhanded ways to try to avoid the tariffs by the way you ship your resin to China, but it is not our recommendation to try to beat the system. Instead understand the current issues surrounding low volume resin shipments into China and adapt accordingly so you do not get stung.
If you would like to learn more about the state of high anti-dumping tariffs on PPS or if you have a question on tariffs for other resins, please feel free to get in touch with our team [email protected]. We would be happy to help you find the correct information pertaining to your specific resin needs so you do not get stung by high tariffs.
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