U.S. Imposes Sudden Tariffs, Plunging Asian PET Market into Turmoil

Following an executive order signed by U.S. President Trump, the United States imposed comprehensive tariffs on polyethylene terephthalate (PET) starting September 8. Previously, Asian producers—key suppliers of U.S. PET—had been exempt from these tariffs. This move has triggered turmoil in the Asian PET market, with Asian producers urgently assessing the policy's market impact. Some Asian producers indicated that if export prices to the U.S. lose competitiveness, they may redirect trade flows.

Industry insiders noted the tariff has already caused immediate trade disruptions. "This is undoubtedly a negative blow to Southeast Asian PET producers," said a trader, as demand from the U.S. is crucial for the region. Recyclers are also affected, as they use the same Harmonized System (HS) code for exporting recycled PET resin as for virgin PET, resulting in recycled material facing similar tariff pressures. According to S&P Global Commodity Insights data, the price of recycled PET in Southeast Asia was $840 per ton on September 9, and this news could further depress prices. There are concerns that Southeast Asian suppliers might divert shipments to India, where demand is already weak. An Indian source commented: "Increased imports of cheaper PET into India could further drag down the market, which is already struggling with weak domestic consumption."

Market participants say the tariff shock is propagating upstream, potentially weakening demand further for raw materials such as purified terephthalic acid (PTA) and ethylene glycol. "Market sentiment is pessimistic, and buyers are considering production cuts," revealed a PTA producer. Indian producers have already reduced operating rates due to high costs and weak global demand, with overall PET plant utilization in India currently around 70%.

Analysts point out that as the U.S. successively imposes tariffs on paraxylene, PTA, and PET, its procurement strategies may be forced to adjust. Cost competitiveness is expected to become the dominant factor shaping trade flows over the coming months. As of September 3, S&P Global assessed Northeast Asian PET prices at $765 per ton FOB and Southeast Asian prices at $850 per ton FOB.