US-China Trade Tensions to Delay Impact on German Chemicals, Chinese Firms Defiant
US-China trade tensions are expected to have a delayed impact on the German chemical industry, while Chinese companies initially react with defiance and optimism to US tariffs.
US President Trump's 145% tariffs on chemical imports from China have sparked varied reactions from Chinese companies and media. Initially, they expressed defiance, stating that the tariffs would mainly hurt the US. ChemChina, with its extensive overseas business covering over 80 countries and regions, reported minimal impact. Satellite Chemical, however, anticipates a 3-5% cost increase due to 34% tariffs on ethylene imports, but expects to offset this with domestic supply gaps and price increases. Chinese companies also acknowledge potential benefits, such as increased domestic prices encouraging alternative production methods like MTO.
The effects of these taxes on German chemical exports are expected to be felt from 2027 onwards. This is due to postponed EU regulations like the Carbon Border Adjustment Mechanism (CBAM), which impacts import-related emissions costs. These regulations have their certificate purchase obligations postponed to 2027, allowing companies more time to adapt. Despite this, the impact on China's chemical industry is expected to be manageable, as exports to the US account for only about 10% of China's chemical exports and 1% of total chemical sales. China's progress in establishing domestic chemical value chains may also help mitigate the effects of US tariffs.
While US tariffs on Chinese chemicals have led to varied reactions from Chinese companies, the impact on China's chemical industry is expected to be manageable. The effects on the German chemical industry are anticipated to become noticeable from 2027 onwards, primarily due to EU regulations. Despite these challenges, Chinese companies remain optimistic, acknowledging potential benefits and domestic opportunities.
Read also:
- EU's Role in Brazilian Rainforest Destruction
- India's Massive Dam Project in Arunachal Pradesh Sparks Local Concerns and China Tensions
- Connecticut and Rhode Island seek court order to reactivate Revolution Wind project
- Catastrophic blast at a US Steel facility in Pennsylvania causes 2 fatalities, inflicts injuries on 10 individuals
