Perc Pineda, PhD
Chief Economist, PLASTICS
June 11, 2025
Just behind Mexico and Canada, China is the third-largest export market for the U.S. plastics industry—including plastic materials and resin, products, machinery, and molds. However, unlike Mexico, with which the U.S. maintains a consistent trade surplus, and Canada, where the balance fluctuates between surplus and deficit, the U.S. plastics industry has consistently run a trade deficit with China.
A Key Export Market with a Persistent Trade Gap
By specific sector—particularly resin—the U.S. maintains a significant trade surplus. In 2023, the U.S. had a $4.4 billion resin trade surplus with China. However, the U.S. also had a $14.3 billion trade deficit in plastic products with China that same year.
While the trade deficit is clear, there is also a supply chain dynamic that helps explain the imbalance. For example, in 2023, for every dollar’s worth of U.S. plastic resin exported to Hong Kong, approximately three dollars’ worth of products containing plastic were imported back into the U.S. Plastics are embedded in a wide range of imported goods, including automobiles and electronics.
Recent tariff measures imposed by the Trump administration on multiple trade partners—including China—have prompted U.S. businesses that rely on overseas sourcing, especially from China, to express short-term concern and begin reassessing their longer-term sourcing strategies. Although the U.S. and China began renewed trade negotiations in May 2025, as of May 14, China’s country-specific tariff rate has been temporarily suspended until August 12. During this period, imports from China will be subject to a 10% baseline reciprocal tariff rate, while items previously subject to the 125% rate have been reduced to 34%. With a new round of trade talks scheduled for June 9, the outcome is highly anticipated—and further negotiations are likely to follow.
Looking to the Past for Clues
If history is any guide, U.S. plastics imports from China declined in 2019—a year after the U.S. imposed higher tariffs. Total imports from China fell by 7.0% in 2019, following a 15.9% increase in 2018. Imports of molds dropped 9.0% after rising 3.7% the previous year. A similar pattern was seen in plastic products, which declined 3.3% in 2019 after a 16.4% increase in 2018. Resin imports saw the most dramatic shift, plunging 47.2% in 2019 after surging 28.9% the year before. Imports of machinery experienced two consecutive years of decline—by 17.6% in 2018 and 34.5% in 2019—following a sharp 52.8% increase in 2017.
Will these past developments offer any insight as the U.S. once again moves to impose higher tariffs on imports from China? Especially given that current trade issues are broader in scope, including China’s export restrictions on minerals critical to U.S. industries such as semiconductors, EV batteries, aerospace, and defense—all of which rely on plastics?
Lessons from the Phase One Trade Deal
The ongoing trade talks between the two countries suggest that while President Trump’s “America First” trade policy is likely to remain the basis for U.S. trade, tariff rates will remain subject to negotiation in pursuit of what both sides consider a fair trade arrangement. In the interim, it is expected that both countries will recalibrate their trade positions.
Looking back at the first Trump administration, the Phase One Trade Deal with China—signed on January 15, 2020—included China’s commitment to increase purchases of U.S. goods and implement market reforms. In return, the U.S. suspended tariffs on approximately $160 billion worth of imports from China. The deal also included China’s pledge to purchase an additional $200 billion in U.S. exports by December 31, 2021. However, as documented by the Peterson Institute for International Economics (Bown, 2022), China ultimately did not fulfill this commitment.
Watching for a Repeat—or a Reset
Based on preliminary data, the U.S. trade deficit in plastics declined by 4.5% to $10.8 billion in 2024. Exports fell by 1.2% to $7.3 billion, while imports declined by 3.2% to $18.1 billion. For the year-to-date period ending in April, U.S. plastics exports to China were down 12.9%, while imports from China fell 16.9%. Compared to the same period last year, the U.S. plastics trade deficit with China decreased by 19.5%.
Whether the current trade negotiations with China will lead to a similar outcome remains to be seen. What is clear, however, is that U.S. plastics manufacturers, suppliers, and policymakers must remain adaptable in navigating an evolving trade landscape with one of their most important—though asymmetric—trade relationships.
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