Trump may impose "reciprocal tariffs" on the world, and the chemical market faces a triple shock
author: Ann
2025-03-31
US President Trump will announce the "Reciprocal Tariff" policy on April 2, which has caused a severe shock to the global trade pattern. Industry experts warn that depending on the intensity of policy implementation, the global market may encounter multiple shock waves, and the chemical industry will be the first to bear the brunt.
Since Trump took office, his tariff stick has frequently been wielded against major trading partners: an additional 20% tariff on China, a unified 25% tariff on steel and aluminum products, and recently included automobiles and parts in the 25% tariff list. This "reciprocal tariff" policy is aimed at those economies that impose high tariffs on US goods, covering 20 major trading countries such as Ireland, Germany, Japan, South Korea, and China, marking the escalation of US trade protectionism.
Depending on the intensity of implementation, this policy may have three market impacts. If only reciprocal tariffs are implemented, the market reaction will be relatively mild, but it may trigger countermeasures from other countries; if the value-added tax (VAT) adjustment is added, it will stimulate the US dollar index to jump 50-100 basis points instantly, and global stock markets may fall under pressure; if industry-specific punitive tariffs are added on the basis of tariffs and VAT, it will trigger a violent chain reaction, and the global supply chain will face the risk of reconstruction.
Policy expectations have stirred the global market in advance. International oil prices staged a roller coaster this week. OPEC+ production cuts and Iran sanctions pushed oil prices to the $70 mark, but the tariff haze put pressure on them to fall. Risk aversion pushed gold prices to a record high. On March 28, spot gold hit $3084.33/ounce, and futures gold was quoted at $3118/ounce.
The domestic chemical market is experiencing a double kill of supply and demand. The spot market continued its weakness since March. According to Jinlianchuang data, the chemical industry index has fallen below 5200 points, setting a new low in 2025. The futures market only briefly turned positive on March 24 and 27, and fell again on March 28, which was in stark contrast to the trend of international crude oil. Market analysts believe that if tariffs continue to increase, the demand for chemical exports that rely on the European and American markets will shrink, forcing companies to accelerate transformation and upgrading.
"The market has already anticipated tariffs, and the short-term impact may be limited, but the long-term impact should not be underestimated." Some institutions suggest that export-oriented companies should establish a diversified market layout, use financial derivatives to hedge risks, and accelerate technology upgrades and industrial chain extensions. As the policy window on April 2 approaches, the global market is holding its breath. This tariff storm initiated by the White House will not only test the resilience of the global trade system, but will also deeply reshape the competitive landscape of sensitive industries such as chemicals.
Since Trump took office, his tariff stick has frequently been wielded against major trading partners: an additional 20% tariff on China, a unified 25% tariff on steel and aluminum products, and recently included automobiles and parts in the 25% tariff list. This "reciprocal tariff" policy is aimed at those economies that impose high tariffs on US goods, covering 20 major trading countries such as Ireland, Germany, Japan, South Korea, and China, marking the escalation of US trade protectionism.
Depending on the intensity of implementation, this policy may have three market impacts. If only reciprocal tariffs are implemented, the market reaction will be relatively mild, but it may trigger countermeasures from other countries; if the value-added tax (VAT) adjustment is added, it will stimulate the US dollar index to jump 50-100 basis points instantly, and global stock markets may fall under pressure; if industry-specific punitive tariffs are added on the basis of tariffs and VAT, it will trigger a violent chain reaction, and the global supply chain will face the risk of reconstruction.
Policy expectations have stirred the global market in advance. International oil prices staged a roller coaster this week. OPEC+ production cuts and Iran sanctions pushed oil prices to the $70 mark, but the tariff haze put pressure on them to fall. Risk aversion pushed gold prices to a record high. On March 28, spot gold hit $3084.33/ounce, and futures gold was quoted at $3118/ounce.
The domestic chemical market is experiencing a double kill of supply and demand. The spot market continued its weakness since March. According to Jinlianchuang data, the chemical industry index has fallen below 5200 points, setting a new low in 2025. The futures market only briefly turned positive on March 24 and 27, and fell again on March 28, which was in stark contrast to the trend of international crude oil. Market analysts believe that if tariffs continue to increase, the demand for chemical exports that rely on the European and American markets will shrink, forcing companies to accelerate transformation and upgrading.
"The market has already anticipated tariffs, and the short-term impact may be limited, but the long-term impact should not be underestimated." Some institutions suggest that export-oriented companies should establish a diversified market layout, use financial derivatives to hedge risks, and accelerate technology upgrades and industrial chain extensions. As the policy window on April 2 approaches, the global market is holding its breath. This tariff storm initiated by the White House will not only test the resilience of the global trade system, but will also deeply reshape the competitive landscape of sensitive industries such as chemicals.
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