How Big Is the Plastics Trade Deficit?

You may have an anxious feeling that the United States is being flooded with plastics imports and that the water is steadily rising. A new report from the Society of the Plastics Industry (SPI) will confirm some of your fears and put hard numbers behind them. In Global Business Trends, SPI reports that imports of processed plastics products grew by 33.3% from 2003 to 2005 (the latest data in this report). At the same time, exports grew 20.4%. Thus, the net trade deficit in processed plastics ballooned almost 85% from $3.3 billion to $6.1 billion. Among the top categories of imported plastics products were household and toilet articles, sacks and bags, tableware and kitchenware, and packaging materials.

The good news is that the $6.1 billion trade deficit was only 3.5% of the $170.1 billion U.S. output of processed plastics in 2005. Imports were just 12.4% of domestic consumption, up from 10.5% in 2003. Fortunately, SPI’s preview of 2006 trade data shows no growth in the trade deficit last year (see graph).

The picture looks both better and worse if you consider processed plastics included in imports of goods like appliances, cars, toys, and packaged chemicals. Total imports including such “contained” plastics products grew slightly slower—29.3% from 2003 to ’05—and the total trade deficit rose almost 40%. But that total deficit amounted to $28.2 billion, or 16.6% of domestic shipments.

If you suspect China as the main culprit, you’re right. China’s trade surplus with the U.S. in processed plastics was more than $6.4 billion in 2005, up almost 50% since 2003. China’s share of total U.S. consumption of processed plastics was 3.9% in 2005, up from 2.6% in ’03. If you add processed plastics contained in other imports, China’s trade surplus is estimated at a whopping $15.1 billion, or 53.5% of the total U.S. trade deficit in processed plastics. (Visit www.plasticsdatasource.org)