HOUSTON (ICIS)–Chemical plants and refineries along the Gulf Coast of the US will likely face another winter that will be warmer than usual but punctuated with brief periods of freezing temperatures, which could disrupt operations. Meteorologists expect winter temperatures in the US will be colder than the previous year but still warmer than average. A meteorologist in Texas warned that the state could face another brief spell of freezing temperatures similar to past winters, such as the devastating Winter Storm Uri in 2021. Chemical plants in the Gulf Coast still have trouble operating in freezing temperatures despite improvements made since Uri. COLD SPELLS CONTINUE TO DISRUPT GULF COAST CHEM PLANTSBrief spells of freezing temperatures are becoming an annual feature of winters in the Gulf Coast, even as the overall season becomes warmer, according to a presentation made earlier this year by Chris Coleman, the supervisor of operational forecasting at Electric Reliability Council of Texas (ERCOT), which manages the flow of electricity in most of the state. This upcoming winter could continue the trend. Coleman warned that the state has a greater than average chance of suffering from freezing temperatures – even though the season as a whole will be warmer than usual. Meteorology firm AccuWeather also warned that the US will be vulnerable to a blast of cold temperatures despite the forecast for a warm winter. Such blasts are caused by polar vortexes, and February is the most probable month when one will move across the eastern US. AccuWeather did not say whether such a polar vortex could hit Texas. CHANCES OF CHEM OUTAGESFor chemical plants, freezing temperatures can cause outages by disrupting operations or by blackouts caused by excessive electricity demand. Such a demand spike caused the widespread plant outages during winter storm Uri in 2021. Since then, Texas has avoided state-wide outages despite continued cold spells and growing demand for electricity. The state’s power grid is more reliable, and it has conducted more weatherization inspections, ERCOT said. If the power grid in Texas holds up this winter, then chemical disruptions would be caused by freezing temperatures shutting down operations at specific plants. Even after Uri, steps taken by some companies still did not prevent cold temperatures from disrupting their operations. During the freeze of December 2022, TotalEnergies shut down its polypropylene (PP) units at La Porte, Texas, even though the company said it took all precautions possible through freeze protection and heat tracing. US WINTER COOLER THAN 2023-2024Meteorologists at the National Oceanic and Atmospheric Administration (NOAA) expect winter temperatures will be warmer than average for the southern and eastern US. That said, they will still be cooler than the previous year, according to the Energy Information Administration (EIA). Those cooler temperatures have led the EIA to expect average prices for natural gas to reach $3.00/million Btu in 2025, up from $2.20/million Btu in 2024. Natural gas is important to the chemical industry because they use it as fuel and because it influences prices for ethane, the predominant feedstock that US crackers use to make ethylene. MORE LNG TERMINALS WILL START UPA growing source of gas demand is made up of terminals that export liquefied natural gas (LNG). The following table lists the terminals that should start up in 2025 and later. Capacity figures are listed in millions of tonnes/year. Project Developer Capacity Estimates Start Up Corpus Christi Stage 3 Cheniere 10 2025 Plaquemines LNG Venture Global 20 2025 Golden Pass LNG ExxonMobil/QatarEnergy 15.6 2027 Port Arthur LNG Sempra 13 2027 Rio Grande LNG Phase 1 NextDecade 17.6 2027 Insight article by Al Greenwood Thumbnail shows ice. Image by David J Phillip/AP/Shutterstock

SINGAPORE (ICIS)–Click here to see the latest blog post on Asian Chemical Connections by John Richardson. Lots of focus has been on the Trump effect on the US trading relationship with China. But we need to think more broadly than this. I see a significant risk that next year we will see trade tensions also increasing between other countries and China for the reasons described in today’s post. See today’s, main slide, showing China’s percentage shares of global capacities for some polymers in 2009 (the beginning of China’s giant economic stimulus programme) versus 2021 (the Evergrande Turning Point) and 2025. Producers elsewhere, seeing charts such as this one, could be anxious to protect market share and avoid commoditisation for polymers such as acrylonitrile butadiene styrene (ABS) and ethylene vinyl acetate (EVA) which can be higher value in some end-use applications. In polypropylene (PP), China’s share of global capacities was just 15% in 2009 and 26% in 2021. ICIS forecasts this will next year jump to 45%. We have already seen an uptick in protectionist measures against Chinese PP. More broadly, China’s investment in export-based manufacturing capacity has accelerated since late 2021 to compensate for the end of the property bubble. China has dominated exports of finished goods for 20-odd years. But ICIS data, such as today’s first chart, and other data show that this has gone to a different level since the end of 2021. International trade used to be a win/win game, but the data suggest that China has recently gained stronger positions in low, medium and high-value manufacturing. What form will any increase in protectionism take in 2025? To what extent could it be short-term our “knee jerk” versus further strategic initiatives to reshore manufacturing? To what degree is it too late for strategies in some countries and regions? I’ve been recently polling people on the German auto industry. It is too late to turn around the decline in the industry, was the majority view. If true, this would obviously have huge implications for Germany’s chemicals companies. If “protectionism” and “China” are the words of the year in 2025, expect chemicals trade flows and pricing patterns to be significantly reshaped by announcements of investigations into new duties and the imposition of duties. Keeping on top of news on trade protectionism, especially if you can get the news before your competitors, will be a significant competitive advantage. And every action can promote a reaction. We must consider how China might respond to more duties. Its responses will of course also affect chemicals trade flows, pricing patterns and demand in different regions. Good luck out there. Next year is going to be very, very challenging for reasons beyond just protectionism. Editor’s note: This blog post is an opinion piece. The views expressed are those of the author, and do not necessarily represent those of ICIS.

HOUSTON (ICIS)–US listed shares of chemical companies fell sharply on Wednesday, with many falling by more than 4%, after the Federal Reserve lowered its expectations for rate cuts and raised them for inflation. The following table summarizes the major indices followed by ICIS. Index 18-Dec Change % Dow Jones Industrial Average 42,326.87 -1,123.03 -2.58% S&P 500 5,872.16 -178.45 -2.95% Dow Jones US Chemicals Index 829.38 -21.74 -2.55% S&P 500 Chemicals Industry Index 871.47 -23.78 -2.66% The Federal Reserve lowered its benchmark federal funds rate by a quarter point as expected. However, it now expects to lower rates by a half point in 2025, down from earlier expectations of cuts totaling 1 point. Meanwhile, inflation may not reach the Fed’s target until 2027. The prospect of fewer rate cuts contributed to a run-up in yields for longer term government debt. The yield on 10-year Treasury notes rose past 4.5%, a level it last reached at the end of May. Yield on these notes affects rates for other types of longer term debt, notably those for 30-year mortgages. Elevated mortgage rates have made housing unaffordable for a growing number of consumers. That has lowered demand for houses, appliances and furniture, all important end markets for many plastics and chemicals. If longer term rates remain elevated, it is unlikely that chemical markets will recover as expected in the second half of 2025. DEFICIT CONTRIBUTES TO ELEVATED MORTGAGE RATESAnother trend elevating rates on longer term debt is the growing size of the government deficit. To fund the expanding deficit, the US will issue larger amounts of government debt. An increase in the supply of debt will lower prices, and yields on debt are inversely related to price. PRICES FOR US-LISTED CHEMICAL SHARESThe following table lists the US-listed shares of chemical companies followed by ICIS. Symbol Name $ Current Price $ Change % Change ASIX AdvanSix 28.72 -1.38 -4.58% AVNT Avient 42.37 -3.55 -7.73% AXTA Axalta Coating Systems 35.01 -1.38 -3.79% BAK Braskem 3.98 -0.29 -6.79% CC Chemours 17.36 -0.85 -4.67% CE Celanese 67.94 -0.47 -0.69% DD DuPont 77.62 -2.51 -3.13% DOW Dow 40.15 -0.42 -1.04% EMN Eastman 90.95 -4.40 -4.61% FUL HB Fuller 69.81 -2.16 -3.00% HUN Huntsman 18.3 -0.26 -1.40% KRO Kronos Worldwide 9.77 -0.19 -1.91% LYB LyondellBasell 74.8 -0.64 -0.85% MEOH Methanex 45.75 -1.37 -2.91% NEU NewMarket 522.36 -16.76 -3.11% NGVT Ingevity 41.61 -1.79 -4.12% OLN Olin 34.1 -1.37 -3.86% PPG PPG 121.25 -0.81 -0.66% RPM RPM International 126.49 -4.93 -3.75% SCL Stepan 68.33 -3.17 -4.43% SHW Sherwin-Williams 348.66 -14.13 -3.89% TROX Tronox 10.53 0.39 3.85% TSE Trinseo 5.41 -1.17 -17.78% WLK Westlake 115.54 -2.00 -1.70%

HOUSTON (ICIS)–The US Department of Agriculture (USDA) announced it is making more than $116 million in investments for domestic fertilizer production to increase competition, lower fertilizer costs for farmers and lower food costs for consumers. USDA is awarding the funds through the Fertilizer Production Expansion Program to help eight facilities expand innovative fertilizer production in California, Colorado, Georgia, Indiana, Iowa, Kansas, Michigan, Oklahoma and Wisconsin. “When we invest in domestic supply chains, we drive down input costs and increase options for farmers. Through today’s investments to make more fertilizer, USDA is bringing jobs back to the United States, lowering costs for families, and supporting farmer income,” said Tom Vilsack, USDA Secretary. Through the Fertilizer Production Expansion Program, the USDA has invested $517 million in 76 fertilizer production facilities to expand access to domestic fertilizer options for growers in 34 states and Puerto Rico. It is expected these efforts will see US fertilizer production increase by 11.8 million short tons annually and create more than 1,300 jobs in rural communities. Projects receiving this round of funding include California company Biofiltro USA Inc. which will use a $2.3 million grant to construct a new facility to process manure from dairy cows and yield more than 33,000 cubic yards of composted fertilizer alternative annually. In Georgia, Reve Solutions Inc. will have $1.3 million to expand a biosolid fertilizer composter and increase capacity through additional equipment and working capital for two production locations. This undertaking is expected to generate more than 30,000 short tons of fertilizer nutrient and create five new jobs. There is also a $2.3 million grant going to Kansas-based Farmers Cooperative Association who will expand an existing dry fertilizer facility with additional storage and processing capacity. The project will improve the efficiency of order processing and will increase its dry fertilizer production to 24,500 short tons per year.

HOUSTON (ICIS)–The Federal Reserve lowered on Wednesday its benchmark interest rate by a quarter point while reducing the number of cuts it expects to make in 2025. The quarter point decline brings the benchmark federal funds rate to 4.25-4.50%. Fed members and presidents expect the rate will fall to 3.9% by the end of 2025. That represents two quarter-point cuts. Earlier in September, the group expected the rate would fall to 3.4%, which represented four quarter-point cuts. The group expects inflation will remain above the Fed’s target of 2%, according to projections they made in regards to the core personal consumption expenditures (PCE), which the central bank’s preferred measure of inflation. The 2025 forecast for core PCE is 2.5%, up from September’s forecast of 2.2%. The group does not expect inflation will reach its target until 2027. CHEMS STILL STRUGGLING WITH ELEVATED LONG-TERM RATESSo far, the current reductions in the federal funds rate have not translated into reductions in longer term rates, such as 10-year treasury notes and 30-year mortgages for home loans. Both remain elevated, and that has limited demand for housing as well as appliances, furniture and other durable goods. These are all large end markets for several plastics and chemicals. Weak demand in these core markets have depressed several plastic and chemical markets. Rates for longer term debt remain elevated, in part, because of the growing size of the US deficit. The US funds the deficit by issuing larger amounts of debt. Those larger debt issuances have raised rates for longer term government debt and private debt with similar maturities. ECONOMIC GROWTH REMAINS SOLIDIn comments identical to its November statement, the Fed said the US economy continues to grow at a solid pace, and unemployment remains low. Inflation remains elevated despite making progress towards the Fed’s 2% target. The following table summarizes the Fed’s economic projections and compares them to the ones it made in September. 2024 2025 2026 2027 GDP 2.5 2.1 2 1.9 Sept GDP 2 2 2 2 Unemployment 4.2 4.3 4.3 4.3 Sept Unemployment 4.4 4.4 4.3 4.2 PCE Inflation 2.4 2.5 2.1 2 Sept PCE Inflation 2.3 2.1 2 2 Core PCE 2.8 2.5 2.2 2 Sept Core PCE 2.6 2.2 2 2 Fed Funds Rate 4.4 3.9 3.4 3.1 Sept Fed Funds Rate 4.4 3.4 2.9 2.9 Source: Fed Thumbnail shows dollars. Image by ICIS.

SAO PAULO (ICIS)–Brazil’s chemicals producers are confident the sector would be mostly spared from potentially higher US import tariffs as the latter maintains a clear trade surplus in bilateral commerce, the country’s trade group Abiquim said to ICIS. In fact, given the clear advantage in bilateral trade, Abiquim said that instead of tariffs they may need to prepare for the US to “facilitate” chemicals trade with Brazil, a net importer of chemicals. Earlier this week, US President-elect Donald Trump mentioned Brazil for the first time as a potential target for higher tariffs because, he argued, Brazil’s import tariffs on US goods are much higher than the other way around. In a written response to ICIS, Abiquim said it “understands” that countries may impose “legitimate emergency tariffs” as a short-term remedy to trade distortions caused by “unfair” imports. It could not be otherwise, after the trade group lobbied hard during 2024 – and successfully achieved – for the Brazilian government to hike import tariffs for a wide of chemicals, as domestic continued losing market share to imports. “We will monitor the eventual developments of this recent [Trump] announcement, especially given the fact that Brazilian chemical products do not have predatory potential in the US market,” said Abiquim. “In other words, we do not expect the imposition of barriers on Brazilian chemicals, but rather more facilitation. Since the chemical balance is clearly favorable to the US, we do not foresee significant restrictions on US imports of chemicals [from Brazil].” The US-Brazil bilateral trade in chemicals has clearly been favoring the US in the past few years, after the country’s shale gas boom made it a net exporter of petrochemicals. According to figures by Brazil’s foreign trade chamber Comex and compiled by Abiquim, Brazil’s trade deficit in chemicals with the US stood at $7.4 billion in 2023. The figure was lower than in 2022 as imports from Asia, mostly from China, increased during the year, but Brazil’s deficit with the US still represented a big chunk of Brazil’s chemicals imports deficit during that year, which stood at $47 billion. Brazil trade with US Imports   Exports   Surplus/deficit     2023 2022 2023 2022 2023 2022 ChemicalsIn ‘000 dollars 9,873,319 11,946,685 2,472,086 2,907,413 -7,401,233 -9,039,272 In tonnage 7,016,919 7,809,290 2,193,470 2,483,008 -4,823,449 -5,326,282 According to figures from the US government, US exports of goods and services to Brazil stood at $37.9 billion in 2023, down more than 25% from 2022, although still an overall trade surplus as Brazil exported to the US goods and services worth $36.9 billion, down 2% percent from 2022. In total, the bilateral trade value stood at $74.8 billion in 2023. “The US purchased a record $29.9 billion in manufactured products from Brazil in 2023, accounting for 81% of total US imports from Brazil, reaffirming the US as the top destination for Brazilian value-added goods,” said the US government. Key industrial Brazilian exports to the US included semi-finished iron and steel products, aircrafts and aircraft parts, and civil engineering equipment, it added. POTENTIAL RETURN OF GSP PROGRAMMoreover, Abiquim said it is expectant to see if the US Congress renews the Generalized System of Preferences (GSP), a program which provided duty-free treatment for thousands of products from designated beneficiary countries and territories (BDCs), mostly developing countries. At the height of the Cold War in the 1970s, the GSP was designed to increase trade with developing countries. The duty-free trade applied both ways, with US companies who purchased under the program exempt from import tariffs. The GSP was authorized by the Trade Act of 1974 and implemented in 1976 but expired in 2020 and is currently pending US Congressional action for renewal. “It is essential to bear in mind that Brazil does not apply discriminatory tariff barriers against the US in the chemical sector and, on the other hand, with regard to access to the US market, Abiquim awaits with great expectation the reactivation of the US tariff benefits program [US-GSP],” it said. “[Its reactivation] will reinvigorate the entry with lower import taxes into the US of several chemical products originating in Brazil which would benefit from the regime.” The US’ chemicals trade group the American Chemistry Council (ACC) and Brazil’s industrial trade group CNI said to ICIS they would not comment at this stage on Trump’s Brazil remarks. The US’ trade groups the American Fuel & Petrochemical Manufacturers (AFPM) and the Society of Chemical Manufacturers & Affiliates (SOCMA) had not responded to a request for comment at the time publishing. Front page picture: Chemicals facilities in Brazil Source: Abiquim Focus article by Jonathan Lopez

SINGAPORE (ICIS)–China’s economic data in November were mixed, with weaker retail sales growth offset by some signs of stability in property prices and a slightly quicker industrial output growth, as policymakers brace for more US trade tariffs once President-elect Donald Trump takes office for a second time. Policy support to ramp up in coming months ahead Retail sales unexpectedly slowed in November Trump 2.0 adds significant risk to trade China’s November property market data showed signs of stabilization, with rates of declines for both new home and used home prices easing from the previous month to 0.2% and 0.35%, respectively. These were the smallest rates of decline recorded since June 2023 for new home prices and in May 2023 for used home prices, data from China’s National Bureau of Statistics (NBS) showed on 16 December. The numbers suggest the market may be bottoming out, with 21 of 70 cities reporting steady or rising new home prices, the highest proportion this year. Property investment in the country, however, continued to contract at double-digit rates in November, falling by 10.4% year on year, with new residential starts and completions contracting by 23.1% and 26.0%, respectively. “Real estate investment still likely faces some hurdles before it is no longer a headwind on growth – prices have not yet stabilized, but property inventories are still relatively elevated at this stage, and property developer sentiment remains cautious,” Dutch banking and financial services firm ING said in a note. “A second consecutive month of improving price data is a positive signal for the property market bottoming out, and we expect a trough to be established in 2025 and the start of an L-shaped recovery to take effect.” RETAIL SALES GROWTH SLOWS Meanwhile, China’s November retail sales growth surprisingly slowed to 3.0% year on year, down from October’s stronger-than-expected 4.8%. Trade-in policies continued to boost specific sectors in November, with household appliances posting a robust 22.2% year-on-year growth, albeit slower than previous months’ increase. Meanwhile, November automobile sales on a year-on-year basis surged to a nine-month high of 6.6%, coming from a 3.7% expansion in October. In contrast, petroleum and related products struggled, recording a 7.1% year-on-year contraction, as the transition to electric vehicles gains momentum. Household confidence clearly remains soft and it remains to be seen if the “vigorous support” for consumption promised next year will be effective in stimulating a recovery, according to ING. “We expect the rollout of supportive policies could take some time, but overall retail sales growth should recover in 2025.” INDUSTRIAL PRODUCTION EDGES HIGHER China’s industrial output showed a modest improvement in November, with the headline growth edging up to 5.4% year on year from 5.3% in October. “Export demand has been a contributor to solid industrial production growth in 2024, but this factor is expected to weaken somewhat in 2025 as tariffs set in,” ING said. The auto sector was a key driver, with output growth accelerating to 15.2% year on year in November, up from 4.8% in October. This uptick was mirrored in November passenger car output, which surged 14.1% year on year, nearly double the 7.7% growth seen in October, according to data from the China Passenger Car Association (CPCA). POLICY SUPPORT TO RAMP UP IN 2025 “Despite data coming in a little softer than expectations, with only one month of data still to come, China will likely manage to complete its ‘around 5%’ growth objective for 2024,” ING said. At the Central Economic Work Conference (CEWC) held on 11-12 December, China’s top leadership pledged to implement robust policy support measures in 2025. Heading into the conference, much of the attention centered on the scale of stimulus needed to bolster China’s growth. While the CEWC affirmed the need for more robust support measures, it remained tight-lipped on specifics. Detailed economic and social targets will be unveiled at the National People’s Congress (NPC) in March 2025, with concrete policy measures likely to follow. China’s fiscal deficit target and the special government bond issuance targets were both raised at the CEWC, which along with November’s Chinese yuan (CNY) 10 trillion debt package should create more room for fiscal stimulus in 2025, according to ING. “The speed and scale of domestic stimulus will likely play the biggest role in determining whether or not China’s economy will be able to maintain stable growth,” it said. “The eventual growth target setting at next year’s Two Sessions meetings in March will give a better indication of how confident policymakers are in terms of growth stabilization.” The Two Sessions are the annual gatherings of China’s top legislative and advisory bodies, the National People’s Congress (NPC) and the Chinese People’s Political Consultative Conference (CPPCC), during which key policies, laws, and leadership appointments are discussed and approved. To achieve this, the government is likely to expand its successful equipment upgrading and consumer goods trade-in program beyond automobiles and home appliances, Ho Woei Chen, an economist at Singapore-based UOB Global Economics & Markets Research, said in a note on 13 December. Future initiatives may encompass a broader range of categories, including services such as tourism and entertainment, as well as emerging areas such as digital and green consumption, Ho said. Additionally, investments in technological innovation, industrial upgrading, and domestic infrastructure – including transportation, energy, and urban renewal projects – are expected to receive a significant boost, she added. “We do expect Beijing to ramp up fiscal deficit and fiscal spending in 2025, but we believe how to spend might be even more relevant than how much will be spent, because this is not a typical downcycle for China,” Japan’s Nomura Global Markets Research said in a note. “Due to the property meltdown, fiscal issues and worsening tensions with the US, China’s economy is not in a normal downcycle, so it may take much more than the recent ‘bazooka’ stimulus package to truly reboot the economy.” A meaningful recovery in China in 2025 will likely require Beijing to tackle several key challenges, including clearing the property market backlog, reforming the fiscal system, strengthening the social welfare system, and easing geopolitical tensions, Nomura noted. “We remain cautious on Beijing’s resolution in clearing the property sector, which has been contracting for almost four years, as the CEWC mentioned little new measures to clear property markets. The CEWC memo did mention reforming the fiscal system, but no details were provided.” THE NEW CHALLENGE IN 2025: TRUMP 2.0 Trump’s victory, coupled with a Republican sweep in the US sets the stage for significant trade policy shifts in 2025 for the world’s biggest economy, as concerns rise over the potential imposition of 60% tariffs on Chinese goods. Nomura expects tariffs to be introduced in a phased manner throughout 2025, mirroring the gradual rollout seen during Trump’s first term. “We assume the actual implementation that would directly impact China’s exports to the US will occur from around mid-2025 and will be mostly concentrated in H2 2025, with some front-loading in H1 2025,” it said. “There is a possibility that the incoming Trump administration may take action to tackle the issue of Chinese export rerouting to the US via third countries, and we believe such a threat is a real risk to China’s export growth over the next couple of years.” Nomura predicts China’s export growth will experience a temporary surge, rising to 8.5% year over year in Q4 2024, up from 6.0% in Q3 2024. This increase is attributed to frontloading, as Chinese exporters rush to avoid the US tariffs in 2025. However, Nomura expects export growth to slow significantly in 2025 due to the anticipated trade headwinds and the frontloading that occurred in Q4 2024. Insight article by Nurluqman Suratman Thumbnail photo: A commercial housing building under construction in Nanjing, China. (Source: Costfoto/NurPhoto/Shutterstock)

TORONTO (ICIS)–Canadian CEOs and business trade groups are warning about the state of Canada’s fiscal policies. Finance minister resigns Deficit larger than expected Canada struggles to respond to US tariff threat Chrystia Freeland on Monday resigned as finance minister and deputy prime minister, saying that she was “at odds” with Prime Minister Justin Trudeau over the best way forward for Canada amid the tariff threat by US President-elect Donald Trump. Trump said on 25 November that as one of his first actions after taking office on 20 January he would impose a 25% tariff on all imports from Canada and Mexico, which would remain in place until the two countries took action on drugs and immigrants entering the US. The tariffs would have a devastating impact on Canada’s economy, which relies on the US as its largest export market by far. In the chemicals and plastics industry, nearly two-thirds of Canadian shipments are exported to the US, according to trade group Chemistry Industry Association of Canada (CIAC). In her resignation letter, Freeland said that Canada needed to take Trump’s threat “extremely seriously” and needed to “keep its fiscal powder dry” to have reserves for a coming “tariff war” with the US. That meant that the government could not afford “costly political gimmicks”. Trudeau’s Liberal-led government recently implemented a two-month sales tax holiday for a number of goods, including beer, cider and restaurant meals, and it promised a Canadian dollar (C$) 250 (US$175) tax rebate for 18.7 million “working Canadians”. The measures, estimated to cost more than C$6 billion, have been criticized by economists. The Business Council of Canada (BCC) said that it was “deeply troubling” that Freeland believed the government was opting for “costly political gimmicks at a time when federal finances are severely strained.” The BCC represents CEOs of Canadian-based companies. Members include, among others, the heads of BASF Canada, Shell Canada, and of ExxonMobil’s Canadian affiliate, Imperial Oil. Canada needed stable and credible leadership that recognizes the seriousness of the significant economic headwinds over the coming weeks, including the looming US tariffs, the council said. The BCC also noted that despite assurances in the 2024 budget that the government would limit the federal deficit to C$40.1 billion, its latest fiscal update on Monday showed that that number ballooned to C$61.9 billion. “By not keeping its economic promises, the federal government is sending the message that it can’t be trusted to manage the public finances”, said BCC president and CEO Goldy Hyder. Another trade group, Canadian Manufacturers and Exporters (CME) said that Canada was facing a “significant economic threat that demands a decisive, coordinated federal response”. “Canadian manufacturers need political stability, and a government committed to implementing policies that foster resilience, attract investment, and drive growth”, said Dennis Darby, president and CEO of CME. POLITICAL CRISIS Trudeau has come under increasing pressure to step down, even from members of his Liberal party. However, he has said he would lead the Liberals into the next election, which needs to be held by October 2025 but will likely be called earlier. The minority Liberal government needs the support of at least one opposition party in parliament to hang on to power. Two parties, the Conservatives and the Bloc Quebecois, want to bring the government down as soon as possible, they have said. The left-leaning New Democrats have called on Trudeau to resign but have not said whether they would vote to bring the government down. The Conservatives are far ahead of the Liberals in opinion polls on elections. The elections and political uncertainties affect investment decisions in the chemical industry, chemical trade group CIAC has said. The bottom line is that Canada finds itself in political turmoil – at a time when is should be united in the face of the US tariff threat. Thumbnail of photo Trudeau (left) meeting Trump in Washington in 2019 during Trump’s first presidency; photo source: Government of Canada (US$1=C$1.43)

SAO PAULO (ICIS)–US President-elect Donald Trump said late on Monday that his administration may impose higher tariffs on goods from Brazil. In a surprise press conference, Trump spoke at length about his proposed strategy to use import tariffs to make the US wealthier, before adding that many countries charge more tariffs on US goods than vice versa. Brazil was included, but the single mention – almost in passing – had the corporate and financial circles in Brazil talking on Tuesday. “We’re going to be treating people very fairly. But the word reciprocal is important, because if somebody charges us… If India charges us a 100% [import tariffs on US goods], do we charge them nothing for the same?” said Trump. “India charges us a lot. Brazil charges us a lot. If they want to charge us, that’s fine, but we’re going to charge them the same thing. That’s a big statement.” Asked by a reporter about concerns that higher import tariffs will prop up inflation, Trump replied, “Make our country rich. Tariffs will make our country rich.” According to figures from the Brazilian government, total trade in goods between Brazil and the US was around $75 billion in 2023. The US is Brazil’s second largest export market after China, and the third largest source of foreign products to Brazil, accounting for 15.8% of total Brazilian imports. Chemicals trade group Abiquim had not responded to a request for comment at the time of writing. In Latin America, Trump also said he will impose higher import tariffs on Mexican goods in his first day in office on 20 January. Mexican and Canadian goods are currently part of a free trade zone within the North American USMCA free trade agreement (FTA). Earlier this month, Mexican chemicals trade group ANIQ expressed its concern about import tariffs given the integration between the chemicals sectors in both countries after nearly 40 years of free trade. “The chemical industries of both countries are deeply integrated throughout their value chain: raw materials cross borders to be transformed into industrial chemical products, which return in both directions to become products with higher added value,” ANIQ said. “The chemical industry once again expresses its support for collaboration and maintaining a solid commercial relationship that will boost economic growth and ensure North America’s competitiveness and sustainability in global markets.”