Europe chems stocks tank amid tariff-driven global sell-off

LONDON (ICIS)–European chemicals stocks fell on Tuesday in line with a wider market sell-off as the US prepares to impose wide-ranging tariffs on Mexico and Canada and China announced retaliatory tariffs on the US, deepening global trade tensions.

The US announced plans to move forward with 25% tariffs on all goods from Canada and Mexico on Tuesday, which the government said was necessary to reduce the flow of drugs into the US.

US President Donald Trump had promised before his inauguration to “sign all necessary documents to charge Mexico and Canada a 25% tariff on all products coming into the US, and its ridiculous open borders.”

Canada Prime Minister Justin Trudeau announced 25% tariffs on Canadian dollars (C$)155 billion (US$ 107 billion) of US goods in response to the move, claiming that less than 1% of the synthetic opioid fentanyl intercepted at the US border came from Canada.

C$30 billion of those tariffs are expected to come into effect immediately, while C$125 billion will be rolled out in the next 21 days. Doug Ford, premier of Canada’s Ontario province, has also threatened to cut off electricity supplies to parts of the eastern US and ban nickel exports.

Canada is a substantial oil exporter to the US, accounting for the majority of total volumes due to US refiner needs for heavy crude grades.

“[The tariffs] will violate the very trade agreement that was negotiated by President Trump in his last term,” Trudeau said.

The Mexican government is expected to respond to the tariffs imposition later on Tuesday.

Commodity markets also took a hit on Tuesday on the back of wider market malaise and reports that OPEC+ intends to move forward with planned output increases next month, despite subdued crude oil demand growth.

China is expected to roll out additional 10-15% tariffs US agricultural products including US poultry and agriculture products such as chicken, corn, beef and wheat, from 10 March.

The country is also expected to place 25 US firms on its export control list, which will involve the imposition of export and investment restrictions. The US placed 10% tariffs on China last month, with an additional 10% expected to come into effect on Tuesday

US and Asia markets closed down on Monday night and Tuesday morning European time, with local markets also sharply down in midday trading.

Germany’s DAX and Italy’s FTSE MIB bourses were trading down nearly 3% apiece, while the UK’s FTSE 250 dropping 1.72% and France’s CAC 40 down 1.71%.

Chemicals stocks also fell sharply, with France’s Arkema and Germany’s LANXESS seeing the sharpest declines, dropping 5% and 4.4% respectively compared to Monday’s close. The STOXX 600 chemicals index dropped 1.25%.

Focus article by Tom Brown

Thumbnail photo: A passer-by in front of a board showing the movement of Japan’s Nikkei exchange on 4 March 2025 (Source: Franck Robichon/EPA-EFE/Shutterstock