Chemicals in 95% of manufactured goods, negative impact on customer sectors

"Given that chemicals are components of 95 per cent of all manufactured goods, tariffs on customer sectors will also have significant negative repercussions," Federchimica president Francesco Buzzella reasons. It is clear that American tariffs "are of great concern, but even more serious would be an escalation into a full-blown trade war," continues Buzzella.

The chemical industry in Italy is strongly integrated in international trade for reasons that go far beyond the market. "In 2024 its exports exceeded EUR 40 billion and, for many companies, foreign markets absorb well over half of their sales. The United States is the fourth largest market for Italian chemicals,' explains Buzzella, and it is therefore understandable that a certain amount of concern is beginning to creep in among the companies. This has even emerged in the negotiations for the renewal of the national collective labour agreement that Federchimica signs together with Farmindustria and which concerns 180 thousand employees.

The sector has a production value of more than EUR 67 billion in 2023 and is Europe's third largest producer (after Germany and France). For several fine and speciality chemicals, it holds even more important positions. In some cases, such as in active pharmaceutical ingredients, it boasts world leadership. Its share of European production is 10% and it ranks 12th worldwide. There are more than 2,800 chemical companies active in Italy - with 3,700 establishments - and they employ almost 113,000 highly qualified workers. The sector is coming from a three-year period of production contraction, while a timid recovery is foreseen for 2025, with a growth of 1.2%, which, however, is subordinate to the context full of unknowns and intense competitive pressures.

International trade is not only the result of commercial ties, but is also due to "the high degree of specialisation that makes imports from foreign suppliers equally relevant. Normally, the US duty applied to chemical products is 6.5%. With an increase to 20%, trade barriers actually more than double, putting the integrity of supply chains at risk,' says Buzzella. For chemicals in particular, however, "the greatest danger stems from duties on Chinese products that lead to a shift towards the European market, exacerbating the already strong competitive pressure. Between 2021 and 2024, in fact, the Chinese share of Italian chemical imports has already increased from 5 to 16% and, in January of this year, imports from China doubled,' the Federchimica chairman continues.

Initiatives that promote exports to alternative markets are certainly 'desirable, but they must necessarily go hand in hand with a European policy to protect competitiveness,' Buzzella observes. 'This means first and foremost avoiding asymmetrical costs with respect to non-European competitors, starting with the cost of energy. More generally, the costs of regulation for the European chemical industry have already reached 13% of turnover from 4% in 2004. If the course is not reversed, they will increase further and risk undermining European production'.