The Paris Climate Agreement

Witness history! On the early morning of the 6th local time, former President Trump, the Republican presidential candidate, delivered a speech at the Palm Beach Convention Center in Florida, announcing his victory in the 2024 presidential election. After a four-year hiatus, Trump, who has been re elected as the President of the United States for the second time, is now 78 years old. Looking back at his tenure from 2017 to 2021, he often questioned the scientific validity of climate change, supported fossil fuels, and led the United States to withdraw from the landmark Paris Climate Agreement. During this year’s election campaign, he once again emphasized the “energy dominance” of natural gas and oil, stating that the United States’ oil reserves are an advantage over China.

1.Increase fossil fuel production or drive up oil prices

According to The New York Times, oil interest groups have donated over $75 million to Trump’s political action committee, and Trump’s campaign team has also made it clear that America’s oil reserves are an advantage over China, and his goal in his second term will be to increase fossil fuel production.

Affected by Trump’s election, the stocks of major oil companies in the United States rose sharply on Wednesday. As of noon Eastern Time, ExxonMobil rose 1.39%, Chevron rose 2.72%, ConocoPhillips surged 3.85%, and Western Petroleum rose 2.32%. This increase reflects the expectation of the US market for the possible recovery of the fossil fuel industry brought about by Trump’s policies. If the US oil market experiences a recovery, global oil prices will definitely increase in the short term, and the associated plastic industry will also face a huge impact. Plastic raw material prices may experience a wave of high growth.

2.Higher tariffs affecting the plastic end market

During the campaign, Trump has repeatedly stated that once he returns to the White House, he will impose tariffs of 10% to 20% on all goods imported into the United States, and specifically target Chinese imports, planning to impose tariffs of up to 60% or even higher. This policy reflects Trump’s consistent stance of trade protectionism and unilateralism. It is reported that in May this year, when the Biden administration announced a 25% tariff on Chinese molds, the American Mold Manufacturers Association stated that the tariff should be set between 30% and 50%. After Trump officially takes office, such companies or organizations may gradually launch attacks.

In addition, Trump’s election has also brought uncertainty to the plastic end products market, including the automotive industry. Honda and other car manufacturers have stated that imposing permanent tariffs on Mexico will affect the number of cars they ship from Mexico to the United States and may lead them to consider shifting production. This uncertainty is undoubtedly a huge challenge for the automotive industry, which relies on a stable supply chain.

Due to the ongoing trade dispute between China and the United States, the scale of bilateral trade is significantly shrinking. This situation has led to a severe loss of numerous product orders, causing severe damage to the global supply chains of multiple industries such as furniture, electromechanical, electronics, textiles, photovoltaics, and automobiles. The related plastic industry will also face enormous pressure, and how to break the deadlock will be the key.

3.The introduction of the plastic recycling bill presents a new opportunity for cooperation between China and the United States

Although the future situation is not optimistic, challenges always coexist with opportunities. In September of this year, the two countries in the United States proposed a bipartisan bill – the 2024 Accelerated Plastic Circular Economy and Recycling Innovation Act, aimed at promoting plastic recycling improvements across the United States to increase the use of recycled materials in packaging. The bill requires that the content of recycled materials in plastic packaging reach at least 30% by 2030.

It is worth noting that even if Trump wants to change relevant policies in the next term, it will not have a significant impact on the current policies of various states. At present, several states in the United States have introduced minimum recycled material requirements for packaging, with some states such as New Jersey passing laws focusing on recycled materials, while others have put forward relevant requirements in expanding producer responsibility laws.

According to relevant reports, North America will become the fastest-growing market for recycled plastics. Against the backdrop of ending international conventions and brand commitments on plastic pollution, the demand for recycled plastics and equipment in the United States is increasing day by day. This will be the target market for excellent recycling and equipment companies in China. How to seize the opportunity and overcome difficulties may be the focus of competition among plastic companies in the coming years.

PS:The specific impact on the plastic industry

A.Fluctuations in raw material costs

The increase in US oil production and export expansion will directly affect international oil price fluctuations, and oil is an important raw material for the plastic industry. Changes in crude oil prices will trigger a chain reaction in the prices of basic chemical products such as ethylene and propylene, affecting overall production costs.

B.US export expansion and global market competition

As the United States continues to strengthen its position as a net exporter of oil, its influence in the global oil market will continue to increase. This will change the dynamics of international trade in the global plastic industry and may lead to fluctuations in raw material import prices. Other oil importing countries may need to adjust their procurement strategies and supply chain stability.

C.The impact of shale oil chemical products on the supply chain

Trump’s policy return may stimulate the expansion of shale oil-based chemical production capacity in the United States, such as polyethylene and polypropylene. The increase in chemical exports may intensify competition in the global market, especially in key demand regions such as Asia, resulting in pricing pressure that may affect the profitability of China and other global plastic manufacturers.

D.Challenges brought by green transformation

Although the Trump administration may relax environmental regulations, the global trend towards green transformation remains unchanged. The plastic industry must continue to innovate and accelerate the development of sustainable materials and environmentally friendly products to meet future stricter international environmental standards.