Trump tariffs put Europe’s chemicals recovery at risk

Big players have cut jobs, closed sites

- PATRICIA WEISS CHRISTOPH STEITZ OLIVER DENZER

The European Union’s fourth-biggest exporting sector after machinery, automotive and pharmaceuticals, has been grappling in recent years with high production costs after gas and power prices soared following Russia's invasion of Ukraine.

That and slowing demand due to struggles in key industries have led some companies in the €655 billion ($767 billion) sector to close sites and cut jobs to save costs.

US import tariffs of at least 15% on goods from the EU have hit many of the industry's main customers, including in the automotive, machinery and consumer goods sectors. Global automakers have booked billions of dollars of losses due to the damage done by President Donald Trump's trade war.

Third-quarter earnings at European chemical companies are expected to fall 5%, following a 22% drop in the second quarter, according to LSEG data.

“Since the energy crisis we've been hoping for a sustained recovery in volumes and margins in the European chemical sector” said Thomas Schulte-Vorwick, an analyst at Metzler Research.