The Office of the United States Trade Representative (USTR) is scheduled to hold public hearings from 10:00 AM (Eastern Time) on July 7 through July 9. These hearings will discuss proposed actions under the Section 301 investigation concerning the failure of 60 economies to implement and effectively enforce bans on the importation of goods made with forced labor.

Previously, the USTR issued a notice regarding the investigation findings and proposed measures concerning these 60 economies. The proposal entails imposing additional Section 301 tariffs of 10% or 12.5% ​​on imports from these economies, citing their failure to enforce forced labor import bans—a condition warranting punitive tariffs under Section 301.

This hearing represents a critical juncture prior to the implementation of the tariff policy. It will gather input from businesses, industry associations, and the public to inform the final tariff decision.

Under the proposed plan, a 12.5% ​​Section 301 tariff would be levied on imports from 46 countries and regions, including mainland China. With the existing 10% global temporary tariff set to expire on July 24, the US intends to seamlessly transition to the new Section 301 tariff regime. Mainland China has been placed in the 12.5% ​​high-tariff bracket, and PE, PVC, and PP are entirely excluded from the tariff exemption list.

Comprehensive Analysis of PE, PVC, and PP Market Trends and Exports

I. Current export activity to the US shows a surge in requests for expedited orders and urgent booking confirmations. While overseas demand appears robust, this is actually a "front-loading" phenomenon where traders and overseas buyers are rushing to stock up before the July 24 deadline. This rush to ship goods early effectively pulls demand forward from future quarters; consequently, orders for raw materials bound for the US are likely to contract significantly once the tariffs officially take effect. Furthermore, new US regulations requiring electronic declarations for consumer goods—effective July 8—will increase customs clearance costs. This will simultaneously weaken the overall competitiveness of Chinese commodity plastics exported to the US, directly altering domestic supply-demand dynamics and spot price trends for these three types of plastics. II. Comparison of Key Data on PE, PVC, and PP Exports to the US in the First Half of 2026 (No Exemptions)

None of these three product categories were included in any tariff exemption lists; they also represent the top three general-purpose plastic raw materials exported from China to the US by volume. Export volumes in the first half of the year showed distinct stratification:

1. Polyethylene (PE)

Cumulative exports of various PE grades from China to the US totaled over 280,000 tons from January to June, the highest among the three categories. There is stable, inelastic demand in the US for packaging, injection-molded, and blow-molded products, while domestic production capacity (both coal-based and oil-based) is ample. Anticipation of tariff changes in the first half of the year drove a surge in "rush exports" from April to June, with month-on-month export volumes rising steadily; PE remains a core plastic raw material source for the US market.

2. PVC (Resin Powder + Downstream Products; 2nd in Export Volume)

Combined exports of PVC resin powder and products (flooring, piping, film, etc.) to the US totaled 160,000–180,000 tons from January to June. PVC flooring accounts for a significant share of plastic exports to the US, driven by steady consumption of virgin PVC resin and processed goods in the US home improvement and construction sectors. Direct exports of resin powder stood at approximately 30,000 tons, with finished products driving the export growth.

3. Polypropylene (PP) (Yarn/Fiber/Injection Molding Grades; 3rd in Export Volume)

Cumulative PP exports to the US totaled approximately 72,000 tons from January to June, primarily supplying the disposable packaging and automotive modified plastics sectors. Overall export volume was far lower than that of PE, as local overseas propylene production capacity serves as a strong substitute for Chinese supplies.

Overall Characteristics: Exports of all three plastic categories to the US saw significant year-on-year increases in the first half of the year. However, the growth was almost entirely driven by stockpiling ahead of the July 24 tariff implementation—representing a short-term "pull-forward" of demand rather than a sustained expansion of actual overseas demand.

III. Differentiated Impacts of New Section 301 Tariffs on PE, PVC, and PP

1. Polyethylene (PE) (Strongest Impact)

PE is the non-exempt category with the largest export volume to the US. Following the July 24 implementation, an additional 12.5% ​​aggregate tariff burden was imposed, causing the landed cost of Chinese supplies to rise significantly above that of ethylene supplies from Southeast Asia, the Middle East, and the Americas. The U.S. packaging industry can flexibly switch overseas sourcing channels; consequently, PE orders bound for the U.S. are expected to see the sharpest decline once the "rush-to-order" phase ends. Excess domestic PE supplies that cannot be diverted to the U.S. will flow back into the domestic market, exacerbating pressure on spot inventory levels.

2. PVC (Downstream products drag down raw material prices)

Direct export volumes of PVC resin powder are limited; however, downstream finished products—such as flooring, profiles, and films—have been included in the 12.5% ​​tariff list. This has squeezed export margins for downstream processors, leading to reduced procurement of virgin PVC resin. The combination of the U.S. construction off-season and rising tariffs has caused a contraction in orders for finished products, which has transmitted downward pressure to upstream resin demand, further weakening essential domestic demand for PVC.

3. Polypropylene (PP) (Impact relatively mild, but under long-term pressure)

The baseline for PP exports to the U.S. is low, and overseas markets possess stronger local self-sufficiency in PP production; thus, the short-term decline in orders is less severe than that for PE or PVC. However, large volumes of domestic general-purpose PP previously relied on exports to absorb excess capacity. With the contraction of U.S.-bound channels, producers have been forced to pivot to fiercely competitive markets like Southeast Asia. This narrowing of export arbitrage opportunities has indirectly suppressed the price floor for domestic PP.

None of these three product categories benefit from tariff relief measures. When the previous 10% temporary tariff is replaced by the new 12.5% ​​levy, the aggregate export cost rises significantly, cooling the long-term procurement interest of overseas buyers.

IV. Review of Domestic PE, PVC, and PP Spot Market Trends (July 2026)

1. Polyethylene (PE)

In early July, the market was briefly supported by a rush of exports, allowing port spot prices to show some resilience against declines, though fundamentals remained generally weak. The domestic market entered the traditional off-season for plastics, with operating rates for agricultural films and packaging remaining low. Although supply tightened slightly due to maintenance at some refining and chemical plants, the "rush-to-order" activity only absorbed circulating inventory in the short term. From mid-to-late July, as shipments to the U.S. wound down, the volume of exports diverted abroad dropped rapidly. Expectations of inventory accumulation at domestic factory warehouses and ports emerged, causing spot prices to fluctuate downward; the SunSirs LLDPE benchmark price trended lower throughout the month. On the cost side, periodic fluctuations in crude oil prices triggered only brief rebounds, as off-season demand was insufficient to sustain a continuous price increase.

2. PVC Resin (SG5)

In July, the market continued to fluctuate within a narrow range at low levels. Downstream demand for pipes and profiles was suppressed by the dual impact of the hot, rainy season and a sluggish real estate sector; processing enterprises engaged only in essential procurement without restocking. While a short-term tariff extension on Indian PU raw materials drove a slight increase in exports, the volume was insufficient to offset the bearish impact of shrinking long-term orders for the US route. Calcium carbide costs provided limited support at the low end, leaving little room for a rebound; traders continued to offload stock whenever prices rose, keeping spot prices weak.

3. Polypropylene (PP)

July saw the continued release of new domestic coal-based and oil-based PP capacity, maintaining an environment of ample supply. Operating rates for downstream sectors like woven plastics and BOPP remained lackluster, with only sporadic purchasing driven by limited early holiday stocking. A short-term rush to export provided slight relief for inventory pressure, but expectations of a contracting US-bound trade channel in late July dampened market sentiment. Spot prices fluctuated at low levels; oil-based producers continued to incur losses, the cost advantage of coal-based production narrowed slightly, and the market lacked upward momentum.

Overall, the market found temporary support in early July from a concentrated rush of exports to the US, but the negative impact of "borrowing demand from the future" materialized in the middle and latter parts of the month. Prices struggled to rise and were prone to falling, resulting in a generally weak, fluctuating trend throughout the month.

V. Outlook for PE, PVC, and PP Exports After July 24

Short-term rush to secure orders exhausted; US-bound exports drop sharply

The period from July 10 to 23 marked the final window for concentrated booking of shipping space. Following the implementation of tariffs on July 24, export volumes to the US for these three types of plastics fell by 30%–60% compared to the rush-order phase of June and July. PE saw the steepest decline, while the volume of raw materials for PVC products dropped in tandem, and PP exports experienced a slight pullback. Cargo originally destined for the US flowed back into the domestic market, increasing inventories at both ports and factories and putting downward pressure on spot prices. The new 12.5% ​​"Section 301" tariff is a long-term, fixed rate with no scheduled expiration, undermining the long-term competitiveness of routes to the U.S. market. Meanwhile, as overseas capacity expansions for ethylene, PVC, and polypropylene come online, foreign buyers are gradually reducing their procurement of Chinese products; this results in a permanent contraction of the annual export volume for these three types of plastics and a downward shift in the baseline for annual spot prices.

Future export prospects rely on regions like Southeast Asia to only marginally offset the decline in U.S.-bound shipments—insufficient to reverse the domestic oversupply situation—leaving plastic spot prices under general downward pressure throughout the second half of the year.

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