The United States Imposes A 10% Tariff On The Entire World, But Will China's Polylactic Acid (PLA) Benefit Instead?

The Bioplastics Research Institute reported that on April 2, 2025, Eastern Time, US President Trump announced the imposition of tariffs on 185 countries, causing a global shock.

 

1. Analysis of U.S. tariff policy

 

The US tariff adjustment policy is complex and far-reaching. On the one hand, a 10% base tariff is set for all imported goods, and the automobile tariff is increased to 25%, which will take effect at 0:01 a.m. on April 5, Eastern Time (12:01 p.m. on April 5, Beijing Time). On the other hand, differentiated tax rates are implemented for major trading partners, divided into three tiers:

 

In the first tier, a minimum base tariff of 10% will be imposed on all imported goods and a 25% tariff will be imposed on imported cars.

 

The second tier imposes higher tariffs on some trading partners, including Cambodia at 49%, Laos at 48%, Vietnam at 46%, Myanmar at 44%, Iraq at 39%, Bangladesh at 37%, Thailand at 36%, China at 34%, the EU at 20%, Japan at 24%, and South Korea at 25%. The higher tariffs are expected to be implemented on April 9.

 

In the third tier (preferential tier), companies that move their factories to the United States can be exempted from tariffs.

 

Number	Country	Reciprocal tariff rates	Number	Country	Reciprocal tariff rates
1	Lesotho	50%	37	Israel	17%
2	Cambodia	49%	38	Philippines	17%
3	Laos	48%	39	Venezuela	15%
4	Madagascar	47%	40	Norway	15%
5	Vietnam	46%	41	Nigeria	14%
6	Sri Lanka	44%	42	U.K.	10%
7	Myanmar	44%	43	Oman	10%
8	Mauritius	40%	44	Uruguay	10%
9	Iraq	39%	45	Bahamas	10%
10	Guyana	38%	46	Ukraine	10%
11	Liechtenstein	37%	47	Bahrain	10%
12	Bangladesh	37%	48	Qatar	10%
13	Serbia	37%	49	Iceland	10%
14	Botswana	37%	50	Kenya	10%
15	Thailand	36%	51	Haiti	10%
16	Bosnia and Herzegovina	35%	52	Bolivia	10%
17	China	34%	53	Panama	10%
18	North Macedonia	33%	54	Ethiopia	10%
19	Fiji	32%	55	Ghana	10%
20	Indonesia	31%	56	Brazil	10%
21	Switzerland	30%	57	Singapore	10%
22	Algeria	30%	58	Chile	10%
23	South Africa	29%	59	Australia	10%
24	Pakistan	28%	60	Türkiye	10%
25	Tunisia	27%	61	Peru	10%
26	Kazakhstan	26%	62	costa rica	10%
27	India	25%	63	Dominican Republic	10%
28	South Korea	24%	64	United Arab Emirates	10%
29	Brunei	24%	65	New Zealand	10%
30	Japan	24%	66	Argentina	10%
31	Malaysia	21%	67	Ecuador	10%
32	Namibia	21%	68	Guatemala	10%
33	Ivory Coast	21%	69	Honduras	10%
34	European Union	20%	70	Egypt	10%
35	Jordan	20%	71	Saudi Arabia	10%
36	Nicaragua	18%	72	El Salvador	10%

 

2. Multinational countermeasures

The US tariff policy triggered a global chain reaction, and many countries quickly responded:

China: On April 4, it took decisive action. Starting from April 10, the State Council Tariff Commission imposed a 34% tariff on all imported goods originating from the United States. At the same time, a series of combined measures such as rare earth export control and anti-dumping investigations were implemented.

 

EU: European Commission President von der Leyen warned that US tariffs would have "terrible consequences" for the global economy and launched a counter-measure mechanism. Tariffs were imposed on US goods worth 26 billion euros in two phases. The first phase started from April 1, targeting Harley motorcycles, bourbon whiskey, orange juice, etc.; the second phase was expanded to aircraft parts, agricultural products, etc. in mid-April, and the scale of retaliation was comparable to US tariffs.

 

Japan and South Korea: Although Japan expressed "extreme regret", it did not take substantive countermeasures, while South Korea implemented a "tariff shock buffer plan" by subsidizing its own automobile and semiconductor industries.

 

Southeast Asian countries: As the hardest-hit area, Vietnam's General Secretary To Lin proposed to reduce the import tariff on the United States to 0% in a phone call with Trump on April 4 in order to seek compromise from the United States. However, the United States has not relented so far and still maintains a 46% tariff rate. Thailand, Cambodia and other countries are facing high tariffs of 36%-49%, which may cause the transfer of supply chains in industries such as textiles and electronics.

 

3. China's re-export trade is being blocked, is it moving to Southeast Asia?

 

During the previous Sino-US trade war, the re-export trade model of "China → Southeast Asia → the United States" effectively reduced the impact of the trade war. Data from 2024 showed that China's total exports to ASEAN reached US$586.524 billion (an increase of 12%), exceeding exports to the United States (US$524.656 billion, an increase of 4.9%) and the European Union (US$516.461 billion, an increase of 3%), and ASEAN became China's largest single export market. In the same year, Vietnam's exports to the United States reached US$123.6 billion, a record high, and there were many Chinese products entering the US market through Southeast Asia.

 

However, after the US tariff adjustment this time, the tariffs of Cambodia (49%), Laos (48%), Vietnam (46%), Myanmar (44%), Thailand (36%) and other countries were higher than China (34%), and the re-export costs rose sharply. Taking Vietnam's re-export as an example, the total cost of goods may be higher than exporting directly from China. Enterprises need to re-evaluate the economic feasibility of re-exports, which may even force these enterprises to abandon these markets.

 

Even if Southeast Asian countries succeed in obtaining "equivalent zero tariffs" (which Vietnam has not yet succeeded in doing) as Vietnam hopes, or obtain low tariffs by giving up some of their interests, the United States has already stepped up its scrutiny of "third-country re-exports". The United States requires that goods undergo substantial processing in Southeast Asian countries (such as changing the tax number and meeting the value-added ratio requirements) before they can enjoy lower tariffs. If they are simply assembled or labeled, they may still be traced back as "made in China" and subject to additional high tariffs.

 

4. China's plastics industry is under pressure, export costs are surging, but polylactic acid is benefiting?

 

The United States is an important export market for China's plastic products. In 2024, China's exports of plastics and their products to the United States reached US$141.192 billion, accounting for 16.76% of total exports. The United States imposed a 34% tariff on Chinese plastic materials. Coupled with rising costs such as transportation and logistics, the profit margins of Chinese plastic companies were compressed by 15%-20%. Merchants in Yiwu Small Commodity Market negotiated tariff sharing with American customers, and some companies tried to raise prices to pass on costs.

 

Faced with the difficulties in the US market, some companies turned to the EU market, but the EU economy has been facing recessionary pressure in recent years. In 2024, the EU's plastic imports fell by 5.2% year-on-year. The US tariff policy has put China's plastic exports in a situation of "double contraction in the United States and Europe", and market expansion is difficult.

 

The situation in the field of biodegradable plastics is special. In 2024, China's biodegradable plastic production will exceed 300,000 tons, and the amount of polylactic acid (PLA) exported by China to the United States is scarce (13 tons in 2023 and 12 tons in 2024), and the impact of the US tariff increase is small. On the contrary, China imports a large amount of PLA from the United States, 19,000 tons in 2023 and 23,000 tons in 2024. After China's countermeasures, the tariff on PLA exported from the United States to China increased by 34%. Calculated at a unit price of 17,200 yuan/ton in 2024, combined with the previous tax rate adjustment, the unit price in the Chinese market soared to 23,500 yuan/ton, greatly reducing its competitiveness.

 

As for PBAT, China exported 186 tons to the United States in 2023 and 523 tons in 2024; the United States exported very small quantities to China, 11 tons in 2023 and 14 tons in 2024, and the impact on the overall trade pattern was negligible.

	China exports to the United States	US exports to China
PBAT
2023	186	11
2024	523	14
PLA
2023	13	19266
2024	12	23395

 

   In general, the US tariff policy has exacerbated the uncertainty of the global industrial chain. The European plastics industry has declined due to high costs and regulatory pressure, while China has relied on technology upgrades and market diversification (expanding the European and "Belt and Road" markets) to improve its competitiveness. As a key area of ​​green transformation, degradable plastics have been impacted in the short term, but they will benefit from the global "plastic ban" trend in the long term, and their future development is still worth looking forward to.