It appears that President-Elect Donald Trump is planning to make good on his campaign pledge to kill the Trans Pacific Partnership (TPP) trade deal. In a recent video address where he outlined his first 100 days as president, Trump promised to pull the U.S. out of the deal on his first day in office. Trump has repeatedly called the deal a “disaster” and has pledged to rebalance trade agreements that could negatively impact jobs in America.
TPP is an ambitious agreement between 12 countries representing 40 percent of the world’s economy that is designed to bolster trade through lower tariffs and unified copyright laws. It has been signed but not yet ratified.
Analysts and politicians can’t seem to agree on whether or not TPP will be a boon for American businesses and workers, or an economic train wreck. Some estimate TPP could kill 448,000 jobs in the U.S. over a decade.
What is clear is that world leaders involved in the deal were disappointed at Trump’s announcement and said that if America withdrawals, it will effectively kill the deal. Some analysts are saying that China — who declined to sign TPP — could attempt to swoop in and fill the void with its own trade deals in Asia.
But Trump has also said that he wants to “negotiate fair bilateral trade deals that bring jobs and industry back” — indicating that there could perhaps be an alternative agreement.
Whichever way it goes, there is a lot of money on the line for the chemicals industry. The American Chemistry Council has expressed “strong support” for TPP and asked that it be quickly ratified by Congress.
Here’s how much the International Trade Administration estimates the U.S. chemicals industry could export to TPP countries under the agreement:
Japan: 100 percent of import taxes on U.S. chemicals exports would be eliminated immediately. The market size for U.S. chemicals including cosmetics, paints, rubber products, fertilizers and plastics = $7 billion.
Malaysia: 88.7 percent of import taxes on U.S. chemicals would be eliminated immediately, 92.8 percent would be eliminated in four years. Market size = $928 million.
Vietnam: 87.5 percent of import taxes would be eliminated immediately, 99.7 would be eliminated within four years. Market size = $465 million.
New Zealand: 83.2 percent of import taxes would be eliminated immediately, 89.5 would be eliminated within four years. Market size = $301 million.
Currently, many chemicals exports face high tariffs in TPP countries such as Vietnam where they are 27 percent on cosmetics, and Japan, Malaysia and Vietnam where tariffs on fertilizers and agro-chemicals are about 30 percent.
Click here to see a document showing all of the chemicals affected by TPP.