AFPM ’25: INSIGHT: New US president brings chems regulatory relief, tariffs

Al Greenwood

13-Mar-2025

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 TAPE
The 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 RULES
The 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:

ENDING FAVORABLE EV RULES
The 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 RESCINDED
The 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 CHEMS
The 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)

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