New US tariffs exacerbate crisis in European chemical industry

Europe's chemical industry is once again under pressure: new US import tariffs of at least 15% are weighing on demand as customers postpone orders.

The sector is still struggling with the aftermath of the 2022 energy crisis and high production costs.

The industry—the EU's fourth-largest export sector after mechanical engineering, automotive, and pharmaceuticals—has already seen plant closures and job cuts.

Further damage is now looming as key customer industries such as automotive and consumer goods are affected by US tariffs.

According to analysts, profits could fall by 5% in the third quarter, following a 22% decline in the second quarter.

Although large corporations such as BASF and Lanxess are somewhat protected by their strong US presence, they are also reporting cautious customers.

In addition, if Chinese manufacturers change course due to US tariffs, there is a threat of falling prices in Europe. The weak dollar is further complicating the situation for exporters.

“The situation is extremely tense,” says one industry representative. A US customer of Hamburg-based medium-sized company Hobum Oleochemicals recently withdrew from a multi-million dollar deal.

(reuters, red)