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Lubes industry could be caught in US-China trade war

Additives industry could be caught up in US-China trade war.

Fuel pump display

Counting the cost? Image: USAF/SA Nichelle Anderson

China has imposed a 25% additional tariff on US automotive imports in response to the President Trump-led $34bn tariff imposition by the US on Chinese goods, including the automotive sector.

With 28.8m cars sold in China during 2017, domestic automakers are considering the possibility of boosting vehicle production levels. According to Bill Russo, CEO of China-based consultancy Automobility: "China only imports out of their 28.8m units about 1.2m vehicles and above, less than 300,000 a year are sold or produced in the United States. So...the tariffs are actually working to make the companies who are doing business with imported vehicles less competitive in the market."

China's additive companies are likely to see an impact on prices for product components and packages made in China for US export, according to Lube Report's analysis of the 'tit-for-tat' battle. However, with more US-based additive, base stock and finished lube companies supplying China than Chinese companies supplying the US, there may be more tariff announcements yet to come.

A probable early casualty of the trade war has been in the IT sector, with China's refusal to approve US chipmaker Qualcomm Inc’s takeover of NXP Semiconductors preventing a $44bn deal.

Tags: automotive industry, China, Lubes marketing, Lubricants, North America, US

Published 28th August, 2018

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