HOUSTON (ICIS)–The new administration of US President Donald Trump is giving chemical companies a break on regulations and proposing tariffs on the nation’s biggest trade partners and on the world. RELIEF FROM RED TAPEThe new administration marks a sharp break from the previous one of the former president,Joe Biden. He proposed a wave of regulations towards the end of his administration that increased costs while providing little benefit to the chemical industry. Several proposed rules under that previous administration will likely fall by the wayside, said Eric Byer, president and CEO of the Alliance for Chemical Distribution (ACD), a trade group that represents chemical distributors. So far under Trump, the regulatory climate has been mostly positive, Byer said. Trump pledged to reduce regulations, and late in his campaign, said he would purge 10 regulations for every one introduced by his administration. The government is conducting earnest analyses of the economic effects of rules, something that the previous administration had glossed over, Byer said. LESS RIGID ENVIRONMENTAL RULESThe Environmental Protection Agency (EPA) is reviewing how it evaluates existing chemicals for safety under its main program, known as TSCA. Among items it could review is the whole chemical approach that the agency adopted under the previous administration. That approach made it likely that the EPA would determine that a chemical posed an unreasonable risk. Such a finding would expose the chemical to more restrictions. For environmental regulations in general, the EPA announced numerous reviews of existing regulations that could have far-reaching effects on costs. The following lists some of the regulations under review: The National Emission Standards for Hazardous Air Pollutants (NESHAPs). The standards for chemical manufacturing will be among those that the EPA will initially review. The greenhouse gas reporting program. The Risk Management Program (RMP). One RMP rule compromised plant safety by requiring companies to share information that had been off limits since the 9/11 terrorist attacks, according to trade groups. The Technology Transitions Program. Currently, the program restricts the use hydrofluorocarbons (HFCs), which are used to make refrigerants and blowing agents for polyurethanes. Terminating the environmental justice and diversity, environment and inclusion (DEI) arms of the EPA. Environmental justice has made it harder to build chemical plants. Particulate matter national ambient air quality standards (PM 2.5 NAAQS). The review could lead to guidance from the EPA that increases both the flexibility and clarity of permitting obligations for chemical plants, according to the ACC. A rule by the previous administration that intended to account for what it described as the social cost of carbon. The Waters of the US Rule. The EPA wants to review the rule to reduce permitting and compliance costs. ENDING FAVORABLE EV RULESThe EPA is reviewing the tailpipe rule that was adopted by the previous administration. The tailpipe rule gradually reduced the carbon dioxide (CO2) emissions of automobiles. Critics have said that this and other regulations from the previous administration were so strict, they acted as bans on vehicles powered by internal combustion engines (ICE). The EPA will also review the standards for model years 2027 and later light-duty and medium-duty vehicles. The Department of Transportation (DOT) wants to reset the Corporate Average Fuel Economy (CAFE) standards, which critics say unduly favor electric vehicles (EVs) by being too strict. SUPERFUND TAX MAY BE RESCINDEDThe Republican controlled government could repeal the Superfund tax, which was imposed in 2022 on several building-block petrochemicals and their derivatives. Confusion arose over how to calculate the taxes for the derivatives. The government also seems to lack the resources to administer the program. So far, legislators have introduced bills in both legislative chambers that would repeal the tax, including Senate Bill 1195 and House of Representatives Bill 640. These would likely need to be part of a larger tax bill. Byer of the ACD said the repeal will not be easy. However, it does have a chance to succeed, and the effort is getting traction among legislators. The ACD, the ACC and the American Fuel & Petrochemical Manufacturers (AFPM) were among the trade groups that signed a letter urging Congress to repeal the tax. TARIFFS POSE RISK TO CHEMSThe tariffs adopted and being proposed by the US could increase costs of imports of steel and aluminium needed to build new plants and repair existing ones. They also increase the costs of minerals used to make catalysts as well as regional imports of plastics and chemicals. US tariffs also expose its chemical industry to retaliatory tariffs. US tariffs could cause short term logistical disruptions because companies will be re-arranging supply chains to avoid the taxes and to secure materials from new suppliers that could be farther away. “I think we will see some near-term reconfiguration of moving products because of the tariffed countries, predominantly China, Mexico and Canada,” Byer said. “Either way, people will reconfigure. My hope is that the reconfiguration part will only last a few weeks to a few months at most so we can get back to just doing straight on trade deals and supply chain movements without to deal with tariff stuff.” Hosted by the American Fuel & Petrochemical Manufacturers (AFPM), the IPC takes place on 23-25 March in San Antonio, Texas. Insight article by Al Greenwood Thumbnail Photo: US Capitol. (By Lucky-photographer)

Additional reporting by Luka Dimitrov Plans for new 1GW Albanian-Italian power cable will likely help with increasing Italian power demand The project also involves the development of 3GW of renewable capacity in Albania and up to 1GW of new data centers in Italy The interconnector is expected to be completed in 2028 LONDON (ICIS) – A new 1GW subsea power cable between Italy and Albania, expected to come online in 2028, is likely to boost Italian demand in upcoming years, traders told ICIS. “The feasibility study for the project is currently underway and the results will determine its prospects”, the Albanian energy ministry said at the start of March. On 15 January Italy, Albania, and the United Arab Emirates signed a cooperation deal to build a 1GW subsea power cable between Italy and Albania. The deal, valued at more than €1 billion, will connect the Albanian port of Vlore with the Italian region of Puglia, the narrowest point between Albania and Italy. NEW ALBANIAN RENEWABLES The project signed by the three countries includes the development of 3GW of new renewable capacity in Albania, a large part of which is to be exported to Italy via the undersea power cable. On 24 February, the Italian energy company Eni announced it had signed an agreement with the Emirati companies Masdar and TAQA Transmission to be “a preferred off-taker” of the new Albanian renewable energy transmitted to Italy. Hydropower currently accounts for almost all of Albania’s domestic electricity generation. “Albanian power producer KESH is every week looking to buy energy due to low hydro stocks. The new project with renewable build-up will be a game changer for Albania and KESH as it will save costs and boost exports,” a local trader told ICIS. Albania is currently a net importer of electricity, but its increasing renewable capacity and new interconnection with Italy could see it switch to a net exporter in upcoming years, Balkan traders said. Indeed, Albania’s Energy Minister Belinda Balluku claimed on social media that the agreement would “play a significant role in increasing the country’s energy capacities, as well as supporting Albania’s goal of becoming a net exporter”. RISING ITALIAN DEMAND Traders expect the new cable to boost Italian power demand, which is set to rise by 2030 driven by data centers, EV and industrial sector expansion. In 2024, Italy imported a net total of 79.6GW from Greece, 97.5GW from Montenegro, and 67.8GW from Slovenia. In 2025 so far, Italy has continued to import more electricity than it exports to the Balkans. This trend is likely to continue amid rising Italian demand. Italian power demand totaled 312.3TWh in 2024 according to the Italian TSO Terna, and is forecast rise to 355.7TWh by 2030, ICIS analytics shows. Italian data center demand is forecast to nearly double within the same time-period, rising from 3.64TWh in 2024 to 7.01TWh in 2030. In February, Eni also signed a letter of intent with the Emirati groups MGX and G42 to develop data centers in Italy with a planned IT capacity of up to 1GW.

SINGAPORE (ICIS)–Click here to see the latest blog post on Asian Chemical Connections by John Richardson. The 1992–2021 Chemicals Supercycle was driven by unique conditions—China’s rapid expansion, globalization, and a massive, debt-fueled boom. That era is over. The industry now faces structural shifts that will reshape markets for decades. What’s different this time? Trade wars & protectionism – China’s economic slowdown is driving aggressive exports, leading to record antidumping measures on chemicals and polymers. Will the trend continue? Climate change & migration – Gaia Vince’s Nomad Century predicts 1.5 billion climate migrants by 2050. How will this shift global chemicals demand? Changing demand patterns – As industries relocate and cities adapt, will traditional GDP-driven demand forecasting still hold? These aren’t just short-term disruptions—they mark a fundamental shift in global petrochemicals. The companies that understand and adapt will be the ones that thrive. Waiting for a return to the old normal isn’t a strategy. The industry is changing—stay ahead of it. 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.

SINGAPORE (ICIS)–Indonesia will impose antidumping duties (ADDs) on nylon film imports from China, Thailand, and Taiwan. The duties, ranging from rupiah (Rp) 1,254 to Rp31,510 per kilogram (kg) will be in effect for four years from late March, Indonesia’s Ministry of Finance said in a statement on 12 March. The ADDs, the highest of which apply to imports from Taiwan, will start after “10 working days” from 11 March, it said. Dumping of imported nylon film products in Indonesia has led to losses in domestic industry, the finance ministry said. Nylon is utilized in various downstream sectors, including automotive, construction, household appliances and electrical products. ($1 = Rp16,439)

MEXICO CITY (ICIS)–The US plastics sector is hopeful free trade in North America will ultimately prevail as the country renegotiates its trade deal with Canada and Mexico in 2026, according to the chief economist at the trade group Plastics Industry Association (PLASTICS). Perc Pineda, chief economist at the trade group, said the previous renegotiation of the North American trade deal USMCA had been beneficial for the three countries’ plastics sectors, pointing to higher percentage of regionally produced plastics going into the automotive sectors, for example. He added that history is already a guide about what happened in US President Donald Trump’s first term, when tariffs on China were imposed and a considerable number of companies operating there set up subsidiaries in other Asian countries such as Vietnam, which only replaced China as supplier but did not bring production back to the US or North America. All in all, Pineda admitted the current ‘chaos’ in the US trade policy after Trump’s second term started in January is creating uneasiness among plastics companies, but he said the focus should be on the “intent of the message” rather than the “theatrics” of how that message is delivered. Pineda was speaking at the plastics trade fair Plastimagen in Mexico City. USCMA HAS BEEN GOOD – DON’T BREAK ITPineda said the USMCA renegotiation under Trump’s first term, which replaced the previous NAFTA agreement from the 1990s, had caused positive effects on the regional plastics sector, which deepened its interconnectedness – the reason why he said it would be very difficult that the plastics sector ended with no trade agreement at all in the region. “We made progress when we transitioned from NAFTA to USMCA. For instance, we have now higher North American content in automotive trade, rising from 62.5% to 75%. That’s an incentive for higher regional production in Mexico, in Canada, and the US. And that’s good for economic growth,” said Pineda. In fact, he was confident that after the current uncertainty in the US trade policy the renegotiation of the USMCA due in 2026 would keep free trade in plastics after all, just like it happened in the transition from NAFTA. Pinda conceded the current shifts in trade policy coming out of the US – with tariffs being announced then quickly reversed, cancelled, or postponed on several occasions – is putting businesses on edge, as investment plans come into question due to the uncertainty. “This is where the chaos starts, troubling businesses. For instance, imports from Mexico that comply with USMCA would be excluded from the 25% tariff at least for another month [after the initial month suspension in February], meaning there a window for President Claudia Sheinbaum to negotiate,” said Pineda. “I trust USMCA will continue. You cannot convince me otherwise that there’s not going to be a free trade of some kind. I remember the first time I spoke at Plastimagen in 2019 – we’ve been through this before. If history is our guide, we will once again face this challenge.” He added the proximity of Mexico and its relation to the manufacturing activity in automotive, for instance, where up to the 33,000 parts going into a vehicle, a third are plastics, would make an outlook without free trade troubling for that manufacturing sector and many others where trade between the countries is intense. “One good example regarding US trade policy is when it imposed tariffs on China. It prompted a lot of Chinese companies to go to other countries such Vietnam, Cambodia, Laos, Malaysia, or Thailand. [In short time] Vietnam suddenly was in the top 20 in the global plastics ranking, in which they had never been before,” said Pineda. “It’s really a result of the change in trade policy that has shifted production of Chinese companies into subsidiaries in other Asian markets. The US now has a trade deficit in plastics with Vietnam on plastic products.” Pineda was asked how business can adapt to the volatility caused by the decision coming out of the White House nearly daily, in trade policy and practically everything else. “If there’s one thing that I can say is focus on the intent of the message, and don’t be overwhelmed by the theatrics of it. I think the message has always been the same, but it is the messenger that is changing on how he is delivering the message, from hour to hour, day to day, month by month, year by year,” he said. “I am even surprised that even the financial markets [with heavy falls this week] are surprised: this is already something that he announced during his presidential campaign: it is the movie we’ve seen before. There will be fair trade eventually.” Pineda wanted to end with a thankful message, speaking to an overwhelmingly Mexican audience aware that the $800 million/year in Mexican plastics exports to the US could be hit hard if tariffs are imposed, according to calculations by the Mexican trade group Anipac. “I’d like to leave the stage by saying, on behalf of the more than 1 million workers in the US plastics industry: thank you very much, Mexico,” he said. “And to the plastics industry in Mexico, I’d like to thank you for sharing your vision and giving us interesting information.” Plastimagen runs on 11-13 March.

HOUSTON (ICIS)–Conflict has caused nations to adopt energy policies that favor security, affordability and reliability over sustainability as they seek to meet rising energy demand for artificial intelligence (AI) among developed countries and rising populations among developing ones. Energy security was brought to the fore by the war between Russia and Ukraine and the subsequent shock to EU industry, according to comments made at the CERAWeek by S&P Global energy conference. Executives at CERAWeek were exuberant about the prospects of rising demand for energy, particularly natural gas. Global demand for oil could reach a plateau by the middle of the next decade, although it could continue to rise as populations grow in emerging economies. RISING ENERGY DEMANDFollowing demand shocks such as war and COVID, governments want  sources of energy that are secure, reliable and affordable. “Energy realism is taking center stage,” said Sultan Ahmed Al Jabr, CEO of the Abu Dhabi National Oil Co. (ADNOC). He made his comments at CERAWeek. “Sustainable progress is not possible without access to reliable, affordable and secure sources of energy.” Murray Auchincloss, the CEO of BP, noted that every government to which he spoke after his appointment stressed the need for affordable and reliable energy. At the same time, the world will need more energy because of population growth, adoption of middle-class habits in emerging economies and AI. Applications like ChatGPT use up to 10 times the energy of a simple web search, Al Jabr said. By 2030, demand for power from data centers in the US will triple, accounting for 10% of consumption. ADNOC is putting money behind its predictions by establishing XRG, an energy investment company with an enterprise value of more than $80 billion. ADNOC and others expect LNG will play a large role in meeting growing demand for reliable and affordable power. Between now and 2050, LNG demand should rise by 65%, according to XRG. In fact, international gas is one of XRG’s three platforms. US energy producer ConocoPhillips is also optimistic about the prospects for LNG, said Ryan Lance, CEO. He sees a growing market shipping low-cost natural gas from North America to higher cost regions in Europe and Asia. OIL HITS PLATEAUUnder current trends, global demand should continue growing slowly until reaching a plateau in the mid-2030s, said Helen Currie, chief economist of ConocoPhillips. In the industrialized world, oil demand is declining, said Eirik Warness, chief economist of Equinor. He expects oil demand to reach a plateau by the end of the decade. One factor behind tapering oil demand is China. It is weaning itself off of petroleum-based fuels in favor of nuclear and renewables for security reasons, said Jeff Currie, chief strategy officer for Carlyle. While these sources of energy have higher upfront costs, they have much lower operational costs when compared with fossil fuels, and they provide a secure source of energy. PROSPECT FOR US OIL PRODUCTIONCEOs at ConocoPhillips and Occidental Petroleum expect US oil production to reach a plateau later in the decade. After that, it should slowly taper using current technology. But energy companies have demonstrated a track record for innovation. If successful, they could extend the production life of US oilfields. Occidental is conducting pilot tests to determine whether it can use carbon dioxide (CO2) in unconventional oil fields like shale, said Vicki Hollub, CEO. The goal is to double oil recovery rates to 20% from 10%. Using CO2 in enhanced oil recovery is already an established technique in conventional fields, and Occidental is building a business around it using direct air capture (DAC). IMPLICATIONS FOR US CHEMSUS ethylene plants rely predominantly on ethane as a feedstock, and its cost tends to rise and fall with that for natural gas. At the least, rising gas demand could establish a floor on prices for the fuel and potentially lead to spikes as supply struggles to keep up with demand. At the same time, prices for petrochemicals tend to rise and fall with those for crude oil. Flat or falling demand for oil could set a ceiling on prices for petrochemicals. CERAWeek by S&P Global runs through Friday. Insight article by Al Greenwood (Thumbnail shows an LNG tanker. Image by Xinhua/Shutterstock)

HOUSTON (ICIS)–The threat of additional US tariffs, retaliatory tariffs from trading partners, and their potential impact is fostering a heightened level of uncertainty, dampening consumer, business and investor sentiment, along with clouding the 2025 outlook for chemicals and economies. The US chemical industry, a massive net exporter of chemicals and plastics to the tune of over $30 billion annually, is particularly exposed to retaliatory tariffs. Chemical company earnings guidance for Q1 and all of 2025 is already subdued, with the one common theme from the investor calls being little-to-no help expected from macroeconomic factors this year. Tariffs only cloud the outlook further. Tariffs have long been a feature of US economic and fiscal policy. In the period to the 1940s, tariffs were used as a major revenue source to fund the federal government before the introduction of the income tax and were also used to protect domestic industries. After 1945, a neo-liberal world order arose, which resulted in a lowering of tariffs and other trade barriers and the rise of globalization. With the collapse of the Doha Round of trade negotiations in 2008, this drive stalled and began to reverse. Heading into this year’s International Petrochemical Conference (IPC) hosted by the American Fuel & Petrochemical Manufacturers (AFPM), it is clear that the neo-liberal world order has ended. Rising geopolitical tensions and logistics issues from COVID led many firms to diversify supply chains, leading to reshoring benefiting India, Southeast Asia, Mexico and others, and to the rise of a multi-polar world. It is also resulting in the rise of tariffs and other trade barriers around the world, most notably as US trade policy. FLUID US TRADE POLICYThe US administration’s policy stance on tariffs has been very fluid, changing from day to day. It is implementing 25% tariffs on steel and aluminium imports on 12 March and has already placed additional tariffs of 20% on all imports from China as of 4 March (10% on 4 February, plus 10% on 4 March). On 11 March, the US announced steel and aluminium tariffs on Canada would be ramped up to 50% in retaliation for Canadian province Ontario placing 25% tariffs on electricity exports to the US. Later, Ontario suspended the US electricity surcharge, and the US did not impose the 50% steel and aluminium tariff. The US had placed 25% tariffs on imports from Canada (10% on energy) and Mexico on 4 March but then on 5 March exempted automotive and then on 6 March announced a pause until 2 April. China retaliated by implementing 15% tariffs on US imports of meat, fish and various crops, along with liquefied natural gas (LNG) and coal. Canada retaliated with 25% tariffs on C$30 billion worth of goods on 4 March and then with the US pause, is delaying a second round of tariffs on C$125 billion of US imports until 2 April. Mexico planned to retaliate on 9 March but has not following the US pause. US President Trump has also threatened the EU with 25% tariffs. We have a trade war and as 1960s Motown artist Edwin Starr sang, “War, huh, yeah… What is it good for?… Absolutely nothing.” Canada, Mexico and China are the top three trading partners of the US, collectively making up over 40% of US imports and exports. The three North American economies, until recently, had low or non-existent tariffs on almost all of the goods they trade. This dates back to the 1994 NAFTA free trade agreement, which was renegotiated in 2020 as the USMCA (US-Mexico-Canada Agreement). A reasoning behind the tariff threats on Canada and Mexico is to force Canada and Mexico to stop illegal drugs and undocumented migrants from crossing into the US. These tariffs were first postponed in early February after both countries promised measures on border security, but apparently more is desired. But the US also runs big trade deficits with both countries. Here, tariffs are seen by the administration as the best way to force companies that want US market access to invest in US production. IMPACT ON AUTOMOTIVEUS automakers are the most exposed end market to US tariffs and potential retaliatory tariffs, as their supply chains are even more highly integrated with Mexico and Canada following the USMCA free trade deal in 2020. The USMCA established Rules of Origin which require a certain amount of content in a vehicle produced within the North America trading partners to avoid duties. For example, at least 75% of a vehicle’s Regional Value Content must come from within the USMCA partners – up from 62.5% under the previous NAFTA deal. Supply chains are deeply intertwined. In the North American light vehicle industry, materials, parts and components can cross borders – and now potential tariff regimes – more than six times before a finished vehicle is delivered to the dealer’s lot. US prices for those goods will likely rise. The degree to which they rise (extent to which tariffs costs will pass through) depends upon availability of alternatives, structure of the domestic industry and pricing power, and currency movements. In addition, some of the Administration’s polices dealing with deregulation, energy, and tax will have a mitigating effect on the negative impact of tariffs for the US. The 25% steel and aluminium tariffs will add nearly $1,500 to the cost of a light vehicle and will result in lower sales for the automotive industry which has been plagued in recent years by affordability issues. If it had been implemented, the 50% tariff on steel and aluminium imports from Canada would only compound the pricing impact. All things being equal, 25% tariffs on the metals would push down sales by about 525,000 units but some of the favorable factors cited above as well as not all costs being passed through to consumers will partially offset the effects of higher metal prices. Partially is the key word. Since so many parts, components, and finished vehicles are produced in Canada and Mexico, US 25% tariffs on all imports from Canada and Mexico would add further to the price effects. The economic law of demand holds that as prices of a good rise, demand for the good will fall. ECONOMIC IMPACTTariffs will dampen demand across myriad industries and markets, and could add to inflation. By demand, we mean the aggregate demand of economists as measured by GDP. Aggregate demand primarily consists of consumer spending, business fixed investment, housing investment, and government purchases of goods and services. Tariffs would likely add to inflation but the effects would begin to dissipate after a year or so. By themselves, the current round of tariffs on steel and aluminium and on goods from Canada, Mexico and China will dampen demand due to higher prices. Plus, as trading partners retaliate, US exports would be at risk. Preliminary estimates suggest the annual impact from these tariffs – in isolation – on US GDP during the next three years could average 1.4 percentage points from baseline GDP growth. Keep in mind that there are many moving parts to the economy and that the more favorable policies could offset some of this and, as a result, the average drag on GDP could be limited to a 0.5 percentage point reduction from the baseline. POTENTIAL GDP IMPACT OF US TARIFFS – 20% ON CHINA, 25% ON MEXICO AND CANADA Real GDP is a good proxy for what could happen in the various end-use markets for plastic resins and the reduction of US economic growth. In outlying years, however, tariffs could support reshoring and business fixed investment. The hits on Mexico and Canada would be particularly. China’s economic growth would be affected as well. But China can shift exports to other markets. Mexico and Canada have fewer options. Resilience will be key to growing uncertainty and will lead to shifting trade patterns and new market opportunities. This is where scenarios, sound planning and strategies, and leadership come into play. US EXPORTS AT RISK, SUPPLY CHAINS TO SHIFTUS PE exports are particularly vulnerable to retaliatory tariffs. The US is specifically targeting tariffs on countries and regions that absorb around 52% of US PE exports – China, the EU, Mexico and Canada, according to an ICIS analysis. Aside from PE, the US exports major volumes of PP, ethylene glycol (EG), methanol, PVC, styrene and vinyl chloride monomer (VCM), along with base oils to countries and regions targeted with tariffs. The US exports nearly 50% of PE production with China and Mexico being major outlets. China has only a 6.5% duty on imports of US PE, having provided its importers with waivers in February 2020 that took rates to pre-US-China trade war levels. The US-China trade war under the first US Trump administration started in 2018 with escalating tariffs on both sides, before a phase 1 deal was struck in December 2019 that removed some tariffs and reduced others. After the waivers offered by China to importers in February 2020, US exports of PE and other ethylene derivatives surged before falling back in 2021 from the COVID impact. They then rocketed higher through 2023 and remained at high levels in 2024. Since 2017, the year before the first US-China trade war, US ethylene and derivative exports to China are up more than 4 times, leaving them more exposed than ever to China. With tariff escalation, chemical trade flows would shift dramatically. Just one example is in isopropanol (IPA). Shell in Sarnia, Ontario, Canada, produces IPA, of which over 85% is shipped to the US, mainly to the northeast customers, said ICIS senior market analyst Manny Borges. “It is a better supply chain for the customers instead of shipping product from the US Gulf,” said Borges. “With the increase in tariffs, we will see several customers shifting volumes to domestic producers or countries where the tariffs are not applied,” he added. US IPA producers are running their plants at around 67% of capacity on average and have sufficient capacity to supply the entire domestic market, the analyst pointed out. This dynamic, where US producers supply more of the local market versus imports, would likely play out across multiple product chains as well, especially in olefins where the US is more than self-sufficient. Even as the US is more than self-sufficient in, and a big net exporter of PE, ethylene glycols, polypropylene (PP) and polyvinyl chloride (PVC), it imports significant quantities from Canada. In the event of a 25% tariff on imports from Canada, US producers could easily fill the gap, although logistics would have to be reworked. Hosted by the American Fuel & Petrochemical Manufacturers (AFPM), the IPC takes place on 23-25 March in San Antonio, Texas. Visit the US tariffs, policy – impact on chemicals and energy topic page Visit the Macroeconomics: Impact on chemicals topic page Insight article by Kevin Swift and Joseph Chang

LONDON (ICIS)–European chemicals stocks firmed in early trading on Wednesday as markets rebounded from the sell off of the last week, despite the onset of US tariffs on aluminium and steel and Europe’s pledge to retaliate. European markets all rallied on Wednesday as companies clawed back some of the losses seen, brought on by growing concerns that global political tensions could spiral into multiple trade wars. Escalating tensions between the US and Canada has driven down markets over the last couple of days, exacerbated by Canada moving to tariff electricity exports and the US doubling steel and aluminium tariffs on the country in response, to 50%. US President Donald Trump reversed the 50% tariffs decision later on Tuesday, but the moved forward with the imposition of 25% global duties on steel and aluminium on Wednesday. European Commission President Ursula von der Leyen said on Wednesday that the bloc would respond proportionately to the measures, but not necessarily at US aluminium and steel. Estimating the value of the tariffs at $28bn, von der Leyen pledged to respond with countermeasures worth €26bn, without setting out what products are expected to be caught in the dragnet. The measures will start on 1 April and expected to enter fully into effect on 13 April, she added. “Over the next two weeks, we will consult with key stakeholders to help us shape this new package,” she said. “The objective is to counterbalance the increased trade value affected by the US tariffs, while minimising the impact on European businesses and consumers. But the disruption caused by tariffs is avoidable if the US Administration accepts our extended hand and works with us to strike a deal,” she added. The tariffs had been clearly signalled ahead of time, giving markets breathing space to price them in, and the EU is a relatively minor exporter of steel and aluminium to the US compared to neighbours Canada and Mexico. Commodity prices also firmed in midday Europe time trading on Wednesday, on the back of the weakening US dollar. The STOXX 600 chemicals index was trading up 1.44% compared to Tuesday’s close, recovering some of the ground lost over the last few days, with Arkema, AkzoNobel, Air Liquide and Fuchs Petrolub among the big gainers. Wider European markets all rallied, with the STOXX Europe 50 index up 1.05%, Germany’s DAX up 1.78% and Italy’s FTSE MIB up 1.43%. US markets tentatively joined the rally in early trading, with the Dow index trading up 0.11%while the S&P 500 firmed 0.85%. The value of the S&P 500 has decline over 8% in the last month. Focus article by Tom Brown

HOUSTON (ICIS)–Whether it is dealing with on-again, off-again tariffs, new charges at US ports for carriers with China-flagged vessels in their fleets, or booking passage through the Panama Canal, participants at this year’s International Petrochemical Conference (IPC) have plenty to talk about. Last year, shippers were dealing with tight global capacity after carriers began avoiding the Suez Canal because of attacks on commercial vessels by Houthi rebels, the possibility of labor issues at US Gulf and East Coast ports, and fewer slots for passage through the Panama Canal as that region dealt with a severe drought. But 2025 has brought a new series of challenges that will keep logistics and supply chain professionals busy. TARIFFS The US has imposed tariffs of 25% on most imports from Canada and Mexico, effective 4 March, but US President Donald Trump said last week that tariffs on goods from Mexico and Canada that are compliant with the USMCA free trade agreement will be exempt until 2 April. It is unclear what shifts in trade flows will be seen once tariffs are fully implemented, but analysts at Dutch banking and financial services corporation ING still expect global trade to see solid growth amid trade tensions, geopolitical risks and economic nationalism. ING expects trade in goods to grow by 2.5% year on year in 2025, driven by heavy front-loading in the first quarter and increased intra-continental trade throughout the year. “While it is true that some countries heavily depend on the US market, such as Canada and Mexico, global trade is far more diverse and does not solely revolve around the United States,” ING said. According to the World Integrated Trade Solution (WITS) data, which contains trade data among 122 countries, the US accounts for 13.6% of total global exports. Additionally, the reliance on raw materials and critical intermediate products that cannot be substituted, as well as new alliances and potential trade deals speak for continued trade in goods. STRATEGIES FOR ADAPTATION Chemical distributor GreenChem Industries offered suggestions that chemical companies could implement to mitigate the effects of tariffs. These include finding new sources for raw materials in regions with favorable trade agreements, modifying transportation routes and methods to lower costs and enhance efficiency, discovering more affordable chemical alternatives that maintain quality, reevaluating trade agreements to secure more competitive pricing, and investigating the potential for manufacturing within strategic markets to avoid extra costs. USTR HEARING ON NEW PORT CHARGES The office of the US Trade Representative (USTR) is accepting public comment on proposed actions against Chinese-owned ships after a Section 301 investigation determined China’s acts, policies and practices to be unreasonable and to burden or restrict US commerce. The proposal includes proposed service fees of up to $1.5 million per US port call for vessels built in China, and up to $1 million per port call for China-based operators. USTR is now accepting public comment and will hold a public hearing on the proposed actions on 24 March. Some market players feel the proposal is aimed at container ships, but a broker in the liquid chemical tanker space said that if the text of the prosed action remains unchanged, the China-built tankers comprising the fleets of shipping majors Stolt and Odjfell could be targeted. As of now, the proposal would include all commercial vessels calling on US ports. The West Gulf Maritime Association (WGMA) said that currently, there is not enough US inventory to meet the demand for maritime transport nor has the USTR suggested plans for meeting the projected demands. There is also not enough shipbuilding capacity within the US to construct the required hulls. Based on the draft executive order, the USTR will have no more than 180 days to implement the port fee collection program. The WGMA intends to individually and collectively submit comments against the proposed policy as written with recommendations, and they strongly encourage all shipping companies and vessel operators do the same through any means available to them. LIQUID CHEMICAL TANKERS Trade data from 2024 shows that about 25% of US liquid bulk exports and 21% of imports were carried on Chinese-built vessels, which will particularly impact the specialty chemical, vegetable oils and renewable fuels sectors. The fees would mean increasing the number of exports on US-flagged vessels and, given the limited existing US-flagged chemical tanker fleet, this will make any shortfall difficult to make up. Typically, it will take 24-36 months for construction of these type of specialized vessels, therefore the industry will face significant challenges in the meantime. These significant increases would most likely lead to a few different scenarios such as substantial rate increases, fewer port calls and potential supply chain disruptions for US manufacturers relying on specialty chemical imports. As a result, most owners and charterers are taking a wait and see approach while looking for longer term solutions. Liquid tanker spot rates hit their highest over the past decade in 2025 but have fallen from the peaks, according to ICIS pricing history. The following chart shows rates over the past year on the US Gulf-Asia trade route. CONTAINER RATES Rates for shipping containers from east Asia and China to the US have fallen considerable this year as capacity adjusted to diversions away from the Suez Canal and as newly built vessels entered the market. Judah Levine, head of research at online freight shipping marketplace and platform provider Freightos, said that the combination of a seasonal slump in demand and the possible end of frontloading ahead of tariffs likely drove the sharp fall in transpacific ocean rates recently. Container ships and costs for shipping containers are relevant to the chemical industry because while most chemicals are liquids and are shipped in tankers, container ships transport polymers, such as polyethylene (PE) and polypropylene (PP), are shipped in pellets. Titanium dioxide (TiO2) is also shipped in containers. They also transport liquid chemicals in isotanks. PANAMA CANAL Because of a severe drought that lowered levels in the freshwater lake that serves the Panama Canal, the Panama Canal Authority (PCA) was forced to limit daily crossings for the first time in its history. The drought was in part brought about because of the El Nino weather phenomenon, which contributes to less rainfall, especially during what is the typical rainy season. But weather patterns have shifted to La Nina, which brings increased rains and have helped levels at Gatun Lake approach capacity. Gabriel Mariscal, agency business manager at port service provider CB Fenton & Co, said the situation at the Panama Canal is completely different from a year ago. “We are not expecting to have any restrictions this year in regard to transit,” Mariscal told ICIS. “In fact, during a normal summer season, perhaps there could be a draft restriction at the Neopanamax locks, but I think that this year that will not be the case.” Mariscal said the PCA is updating regulations for customer rankings. Customer rankings consider the volumes a shipper moved through the canal over the previous 12 months, as well as the number of tolls they have paid. For example, if there are 10 slots for passage on a given day, and the PCA receives 20 requests for those slots, the higher-ranking customers will get priority. If a shipper is unable to book a slot in the first period (90 days before passage) or the second booking period (14 days before passage) then they go to the auction, where the highest bidder wins. Container shipping companies Maersk and MSC are the highest two ranked customers at present. Mariscal said Maersk has at least three vessels that transit the canal each day. PANAMA TENSIONS WITH US Mariscal said that the new presidential administration under Trump has caused some stress for the central American country. Because of this, he expects extreme care to be taken by the PCA when announcing new rules or regulations so as not to increase tensions. Trump surprised some shortly after his inauguration when he said that the US should reclaim the Panama Canal. A US congressman has since introduced a bill that would authorize the purchase of the Panama Canal. Trump threatened to reclaim the canal if Panama did not take immediate steps to curb what Trump called China’s influence and control over the vital waterway. Panama’s president said in early February the country will not renew its agreement with China’s Belt and Road Initiative (BRI) after a visit from US Secretary of State Marco Rubio. Then, last week a consortium led by private equity firm BlackRock agreed to pay $22.8 billion for port terminal operations from Hutchison Port Holdings (HPH), which includes terminals in Panama. It was Hong Kong-listed CK Hutchison’s ownership of the ports at both entrances to the canal that likely concerned Trump. Hosted by the American Fuel & Petrochemical Manufacturers (AFPM), the IPC takes place on 23-25 March in San Antonio, Texas. Visit the US tariffs, policy – impact on chemicals and energy topic page Visit the Macroeconomics: Impact on chemicals topic page Visit the Logistics: Impact on chemicals and energy topic page Focus article by Adam Yanelli Additional reporting by Kevin Callahan Thumbnail image shows a container ship passing through the Panama Canal. Courtesy the Panama Canal Authority