April 10th News: Yesterday, the leading enterprise in the wind vane industry quoted DMC at 14000 yuan/ton, 107 rubber at 14300 yuan/ton, raw rubber at 15000 yuan/ton, dimethyl silicone oil at 15500 yuan/ton, and mixed rubber at 13600 yuan/ton, with a comprehensive reduction of 500 yuan. Monitoring data shows that DMC transaction prices have plummeted within the week! The latest mainstream transaction price is around 13000 yuan/ton, and the core customer of a certain individual enterprise with large inventory has a transaction price of 12800-12900 yuan/ton. At present, the tariff on boots has been implemented, with a cumulative increase of up to 104% in tariffs, undoubtedly a record breaking figure. Taking industries such as electronics, clothing, solar energy, furniture, and home furnishings as examples, it is not difficult to see the severe situation. These industries are all areas where organic silicon is widely used. It is undeniable that with the soaring tariffs, domestic silicone enterprises will face significant pressure in the short term, and how to redefine pricing strategies will be the main direction.
Which silicone products are exempt from tariffs in the United States? It is reported that on April 2nd local time, the White House released a 22 page tariff exemption list, which detailed nearly 1000 types of goods, covering approximately $644 billion in global imports in 2024. These goods include energy products, various minerals, chemicals (widely used in energy and manufacturing industries), as well as metal materials such as steel, aluminum, and copper. Specifically, they include the following categories: 1. In transit goods: goods declared for import or extracted from warehouses for consumption before midnight Eastern Time on April 9th (12:00 Beijing Time on the same day) are exempt from equivalent tariffs. 2. Humanitarian supplies: items such as food, clothing, and medicine used for donation and relief are exempt from taxes. 3. Information products such as publications, films, records, artworks, electronic media (such as CDs, tapes), and press releases are exempt from equivalent tariffs. 4. Goods that are already subject to the tariff control of Article 232, such as steel, aluminum products and their derivatives, passenger cars, light trucks and parts, are not within the scope of equivalent taxation. 5. Specific industrial and livelihood goods, such as copper, pharmaceuticals, chemicals, semiconductors, wood and paper products, metals, etc., are exempt from tariffs. 6. Rare mineral resources: Energy and other mineral products that are lacking in the United States are exempt from equivalent taxation. 7. Products with a high proportion of domestic ingredients in the United States: If the domestic ingredients in the goods account for more than 20% of the declared value by customs, the equivalent tariff will only apply to the non US ingredients.
After sorting, it was found that only primary forms of organosilicon (such as polydimethylsiloxane) are exempt, while other deep processed organosilicon products including silicone products, silicone adhesives, and silicone oils are not on the exemption list. In the short term, there may not be many options for organic silicon export companies to respond, but in the long run, no one can hinder the reconnection of global demand and supply. Therefore, while actively responding to the impact of Trump's high tariffs, Chinese silicone companies should also continue to look to the world. Industry insiders believe that this wave of tariff adjustments will completely reshape the competitive environment of the silicone market, accelerate branding, lose the advantage of low-priced white label homogeneous products, and make high value-added brand products more competitive in order to have premium space. Overseas enterprises need to rely on technological innovation and services to form differentiation. Simply put, low-priced white label homogenization is completely out of the question. Those with technological advantages should quickly upgrade towards branding!
The application of organic silicon is mainly affected in three directions: 1) solar panels and polycrystalline silicon, which are also key components of China's new energy exports. These companies have already suffered from the high tariffs caused by the US "double anti-dumping" and anti subsidy investigations. If such high tariffs are added, it will lead to the loss of competitiveness of Chinese solar products in the US market. 2) Furniture and household goods are also one of the main commodities exported by China to the United States, with an export value of approximately 35 billion US dollars in 2024. The newly increased tariffs will completely offset the price advantage of Chinese furniture, as the average profit margin of furniture products is usually only 10% to 15%. 3) In 2024, the total amount of electronic products exported from China to the United States exceeded 150 billion US dollars, accounting for about a quarter of the total exports to the United States. These electronic products cover various types such as smartphones, laptops, tablets, and smart wearables. The newly increased tariffs will also seriously damage the price advantage of these products in the US market, leading to a sharp decrease in the number of orders.