I. Industry pain under the impact of tariffs
In April 2025, the 45% tariff imposed by the United States on Chinese silicone products officially took effect, directly leading to a sharp drop in China's exports to the United States. Taking silicone rubber as an example, its landed price for export to the United States increased by 38% year-on-year, and its market share was seized by Thailand, Malaysia and other countries. The financial report of Dongyue Silicon Materials, a leading company in the industry, showed that its export revenue to the United States in the first quarter of 2025 fell by 27% year-on-year, and its net profit was compressed to 5.8%.

Under the influence of the price transmission mechanism, the domestic silicone market has seen "ice and fire": DMC prices fell to a historical low of 13,000 yuan/ton, while high-end products such as electronic-grade silicone oil prices rose by 15% against the trend. This differentiation reveals the structural contradictions in the industry - low-end overcapacity and high-end supply shortages coexist.

II. Market reconstruction and corporate strategic adjustment
Faced with tariff pressure, companies adopt multi-dimensional response strategies. A silicone product company in Guangdong has increased its R&D investment to 13% through the "brand innovation moat" strategy, launched environmentally friendly silicone rubber products, and successfully entered the high-end market in Europe. Zhejiang Tiangui has increased its domestic sales ratio from 15% to 35% through the "dual circulation of the market" strategy, and formed industrial chain synergy with domestic automotive interior companies.

The flexible transformation of the supply chain has become the key. Inner Mongolia Shenghe's "annual production of 17,500 tons of silicone oil, silicone and silicone resin project" adopts a DCS distributed control system to achieve full process automation of raw material transportation and reaction control, and improve production efficiency by 40%. This digital transformation enables companies to maintain order response speed amid tariff fluctuations.

3. Policy empowerment and technological breakthrough
Policy support provides a powerful engine for industry transformation. "Made in China 2025" lists silicone as a key development area, and the central government's subsidies for silicone research and development will increase by 20% year-on-year in 2025. Local governments have also taken positive actions. For example, Tiantai County has adopted the "nest-building and phoenix-attracting" policy to help Zhejiang Tiangui solve more than 20 construction problems and promote the project to be put into production six months ahead of schedule.

Technological innovation has become the core of the breakthrough. Domestic enterprises have made breakthroughs in the fields of electronic-grade silicon materials and biodegradable silicone rubber: the photovoltaic silicone sealant developed by Hesheng Silicon Industry has broken the foreign monopoly and increased its market share to 30%; the functional silane products of Chenguang New Materials have passed UL certification and successfully entered the North American market. These technological breakthroughs have reduced China's dependence on imports of high-end silicone products from 10% in 2022 to 3.82% in 2024.

IV. Repositioning and future trends of the global industrial chain
Tariff policies have accelerated the reconstruction of the global silicone industry chain. China maintains its dominant position in the mid- and low-end markets with its cost advantages and policy support, while the United States and Japan consolidate the high-end market through technical barriers. It is predicted that by 2030, China will occupy 40% of the global silicone market and become the largest single market.

In the future, the industry needs to continue to make breakthroughs at three levels: first, strengthen international cooperation and break trade barriers through mutual recognition of technical standards; second, promote green production, such as the "zero wastewater discharge" process of Inner Mongolia Shenghe, to set an environmental protection benchmark for the industry; third, cultivate emerging markets, such as the photovoltaic industry in the Middle East and infrastructure projects in Africa, to create new growth for silicone.

In this tariff storm, China's silicone industry is undergoing a profound transformation from "scale expansion" to "value enhancement". Enterprises are reshaping the competitive landscape of the global industrial chain through technological innovation, market reconstruction and policy coordination. Despite the challenges, the industry's resilience and innovation will support its high-quality development in the wave of globalization.