"Impossible to obtain chemicals due to 30% tariff barriers in the U.S. market"
The European Chemical Industry Council (Cefic) has issued a grim warning, predicting that up to 300 sites could close and 200,000 jobs could be lost in the next 3-5 years due to a regulatory environment that doesn't support the industry. This predicament is further compounded by the looming impact of US tariffs, which are set to take effect on August 1, 2025.
The US administration recently announced a 30% tariff on EU exports, an increase from an earlier 20% levy placed in April 2025, which was temporarily paused. This tariff wave, targeting numerous sectors including chemicals, poses a significant threat to established transatlantic supply chains.
For the European chemical industry, which includes Italy, these tariffs increase production costs for exporters to the US due to higher duties, making EU chemicals less competitive in the US market. The geography of production is also influenced by this policy, as the US has stated that no tariffs would be applied if EU companies manufacture products within the US, incentivizing the relocation or expansion of production facilities into the US to avoid tariffs.
This shift risks eroding Europe’s export volumes and market share in the US, while possibly creating job losses or reduced investment in European chemical production facilities. For Italy, while detailed country-specific figures on the chemical sector are limited, Italy's chemical exports to the US are part of the broader EU chemical export ecosystem, which faces these tariff-driven pressures, potentially harming competitiveness.
The energy crisis is another major factor in chemical production competitiveness. Though US tariffs do not directly target energy products, they indirectly increase operational costs due to supply chain restructuring and potential shifts in sourcing and logistics. The European chemical industry already faces higher energy costs relative to the US, so the tariffs exacerbate existing disadvantages, reducing competitiveness further.
Looking ahead, if the tariffs proceed or escalate without a negotiated resolution, European (including Italian) chemical companies may increasingly relocate production to the US or seek alternative non-US markets. The EU might impose retaliatory tariffs on US chemical imports or related goods, potentially sparking further trade tensions and complicating supply chains.
Long-term, these tariffs could contribute to a geographical shift of chemical manufacturing capacity away from Europe, diminishing its global competitiveness in the sector. Economic forecasts for the broader EU indicate moderate GDP reduction, with uncertainty dampening investment, which likely extends to the chemical industry.
In summary, the 30% US tariffs starting August 2025 substantially threaten the competitiveness of the European and Italian chemical industry by raising export costs, incentivizing production relocation to the US, and compounding existing cost challenges like energy. The situation remains dynamic, pending ongoing trade negotiations between the EU and the US.
- After the announcement of a 30% tariff on EU exports by the US administration, the competition for the European (including Italian) chemical industry in the US market may become even more challenging, as increased production costs due to higher duties could make EU chemicals less competitive.
- With the potential geographical shift of chemical manufacturing capacity away from Europe due to US tariffs, there could be a reduction in business opportunities and potential job losses in the European and Italian chemical industry, as companies may consider relocation or expansion into the US to avoid the tariffs.
