ACC Report Highlights the Dangers of NAFTA Withdrawal for the American Chemical Industry

April
2018

Although modernizing the North American Free Trade Agreement (NAFTA) could help the U.S. capitalize on the chemical industry’s strong competitive advantage, withdrawing from the trade agreement would increase prices for chemical-product manufacturers and consumers, according to a new economic report released by the American Chemistry Council (ACC) in February.

A NAFTA withdrawal is projected to place a $9 billion tariff burden on U.S. chemical exports, the report states, creating a domino effect on the industry that would lead to higher prices. Withdrawal would also pressure its two largest trading partners, Canada and Mexico, to look to China to satisfy demand for chemicals, plastics, and other manufactured goods.

According to the report, U.S. chemicals exports to NAFTA partners could drop by as much as $22 billion, or 45%. This represents a total lost chemistry demand of $29 billion when lost contracts in end-use industries (e.g., automotive and electronics) are combined with direct losses to chemistry exports.

“NAFTA has given chemical producers confidence to invest by providing certainty that increased volumes of U.S. chemical and plastic products will be tariff-free for our NAFTA partners,” says Emily Sanchez, director of economics and data analytics at ACC. “We have a good thing going here, and with...

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