Credit: Associated Press
A container terminal in Duisburg, Germany, on April 3. Many chemicals are, for now, exempt from new US duties.
The Donald J. Trump administration is imposing the toughest trade barriers in generations, levying new duties of at least 10% on every major trading partner. But the duties exempt many chemicals and most pharmaceuticals, semiconductors, and energy products.
“April 2, 2025, will forever be remembered as the day American industry was reborn, the day America’s destiny was reclaimed, and the day that we began to make America wealthy again,” President Trump said at a gathering in the White House’s Rose Garden to announce the new tariffs.
The White House is calling the “Liberation Day” measures reciprocal tariffs that respond to tariff rates in other countries and also take into consideration nontariff trade barriers such as licensing restrictions and anticompetitive practices.
As a result, the US will impose greater duties on certain countries when the tariffs take effect on April 9. For example, European Union countries will see a 20% tariff, and Japan will get a 24% rate.
The White House has excluded many products from the tariffs, including an expansive number of major chemicals. These products include polymers such as polyethylene, polypropylene, polyethylene terephthalate; petrochemicals like phenols and ethylene; and other large-volume chemicals such as titanium dioxide. The list also has exclusions for pharmaceutical products, semiconductors, and energy products. Some products on the exemption list may be subject to later tariffs.
Chemical industry groups are weighing in on the measures carefully. The American Chemistry Council (ACC) says it is studying them to see how they affect the US industry. “ACC wants to work consistently with the Administration on a pro-growth trade agenda that decreases America’s supply chain vulnerabilities while negotiating new measures that benefit domestic production and jobs,” the group says in a statement.
The Society of Chemical Manufacturers and Affiliates (SOCMA) calls for a “strategic, sector-informed approach” in a statement. “Many SOCMA members are now confronting significantly higher costs for the raw materials they rely on—inputs often unavailable at scale within the US,” the trade group says.
In a note to clients, Laurence Alexander, a stock analyst with the investment firm Jefferies, says the most important impact of the new tariffs will be their effect on demand for chemicals from all sources. The global chemical industry overall will face a roughly 0.8% headwind, he says, while demand for chemicals serving durable goods and clothing markets could see as much as a 6% impact.
As the Trump administration rolls out the new tariffs, chemical makers are also worried about proposed ocean shipping rules that they believe could raise costs and disrupt commerce.
The US Trade Representative (USTR) plans to impose a series of fees on international maritime shippers docking in US ports. Under the new rules, Chinese-flagged vessels will be charged $1.0 million upon entering US ports. Non-Chinese operators of Chinese-built vessels will be charged $1.5 million upon arrival at a US port.
The rules are meant to stem the growing Chinese dominance of the shipping industry and rejuvenate the US shipbuilding sector. According to the USTR, China’s share of the industry has grown from 5% in 1999 to 50% in 2023.
“While we support the goal of a strong U.S. shipping and shipbuilding industry the actions as proposed would result in disproportional and untenable costs to the U.S. chemical industry,” Jason Bernstein, the ACC’s director of global affairs, wrote in testimony to the USTR on March 26.
For chemicals such as ethylene glycol and ethanol, the proposed $1.5 million fee would increase freight costs by 170% to 228% and product prices by 33% to 37%, Bernstein said.
In comments filed with the USTR, Nestor de Mattos, vice president of integrated supply chain at Dow, says the measures would add $65 million to $75 million to Dow’s costs annually, “in addition to the undetermined cost of highly disrupted import/export capability, capacity constraints, costly inland transportation congestion and complexity, and significant global supply chain disruption.”
Also weighing in with a letter to the USTR was Ineos chairman Jim Ratcliffe, who is concerned about US exports of ethane, which his company uses to make ethylene in Europe. “The proposed action and related fees risk rendering the export of U.S. ethane gas uneconomical, thus threatening an activity and sector that is key to the Trump administration's bold energy agenda,” he writes.
Chemical & Engineering News
ISSN 0009-2347
Copyright © 2025 American Chemical Society
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