'Chemistry, with tariffs at 30% US market inaccessible'

"If tariffs were confirmed at 30%, for several chemical products the US market would become effectively inaccessible." The president of Federchimica, Francesco Buzzella, draws a very critical perspective on the impact of Trump's tariffs, which have become a major concern for entrepreneurs. We are in a phase in which exogenous costs, such as tariffs and conflicts, and endogenous costs, such as energy and the regulatory tsunami, are undermining the competitiveness of the European and also the Italian chemical industry. The numbers speak for themselves. Those of Federchimica say that "the sector in Italy has lost 11% of the value of production since 2021. And 2025 will still close in the negative, with - 1.5% after the negative numbers of the last three years'. Just yesterday, Buzzella met with the entrepreneurs, after having chosen to dedicate a specific space to the private assembly, which was held separately from the public one (to be held on 27 October) in order to listen more and have a discussion with the associates, also to understand the criticalities and have input and suggestions to implement.

Today a precise assessment of the impact of US tariffs on chemicals 'is not possible due to such a changing and flexible framework over time. Chemicals exports exceed EUR 40 billion and the US is the fourth largest destination market, with almost EUR 3 billion. The impact does not only affect chemicals, but all European manufacturing. Without the export of European manufactured goods, the chemicals that contribute to their production will also be penalised. Moreover, there is a real risk that countries like China will no longer be able to export to the US and will divert everything to Europe. This would harm us doubly: a redirection of Chinese products to the European market would aggravate the already strong competitive pressure. Between 2021 and 2024, China's share of Italian chemical imports has already risen from 6 to 16 per cent and, in the first four months of 2025, these imports increased by a further 24 per cent'.

On the horizon, the risk that US tariffs will shift production away from Italy is fairly limited because 'most of our members are SMEs, very much rooted in Italy,' reasons Buzzella. 'However, the tariffs factor will push some companies, especially the larger ones and multinationals, to look more and more towards the United States and invest in producing there. In general, the geography of production is changing its centre of gravity. "Since 2021, China's chemical production has increased by 26% against an expanding global demand of 9%. In the same period, the US has limited growth to 3% and the EU has lost 12% (-11% in Italy),' says Buzzella. 'A trend that has already been confirmed in the first four months of 2025: despite a precautionary advance on purchases to anticipate tariffs, chemical production has fallen by 0.4% year-on-year, with a significant deterioration in the most recent months. This comes after a disappointing 2024 in which the significant contraction of 2022-2023 was followed by an albeit slight decline. Although the energy crisis has passed its most acute phase, it continues to affect the sector, leading to a deterioration in the trade balance which, in the first months of 2025, has worsened again.

If the picture of the chemical industry is not simple, this weakness does not only characterise Italy but involves Europe, with a trend in Germany - Europe's leading producer - even more penalising (-19%). Italy suffers somewhat less than other European countries, with -11%, thanks also to the smaller share of basic chemicals, which is the most energy-intensive and exposed to overcapacity situations at international level. In basic chemicals, many plants have been lost in Europe, but also in Italy, due to very high energy and raw material costs and regulation. "At the same time, we are witnessing a major increase in chemicals arriving from Asia and China in particular. A competitive asymmetry has been created whereby our industry has higher energy costs, systems linked to emissions and also has to pay for combustion gases. Draghi, in his report, pointed out that in Europe we risk heavy deindustrialisation,' says Buzzella. However, Italy is also managing to contain the slowdown because its share of fine and speciality chemicals production is 55 per cent, while at European level it averages 37 per cent. In contrast, China's chemical production has increased by 26% since 2021, while global demand is expanding by 9%. In the same period, the US limited growth to 3% and the EU lost 12%. Cefic, the European Chemical Industry Council, foresees very worrying figures. It predicts that at this rate we risk the closure of 300 sites and the loss of 200,000 jobs in the next three to five years due to a regulatory framework that does not help the industry.

In this context, among the major concerns of companies are 'energy costs, which is the basis for the competitiveness of the entire system and concerns companies, but also families. "Having low-cost energy is an unimaginable boost for the entire economy and, after all, it was one of the cornerstones of the Mattei plan after World War II," recalls Buzzella. "The chemical industry is among the sectors most sensitive to the cost of energy as it uses fossil fuels both for energy and as raw materials. In recent years, our companies have been incurring energy costs that are significantly higher than those of our main competitors. For Italy, the most penalising aspect is the cost of electricity, which is higher even than in the main European countries. In the first half of 2025, the average wholesale price was 120 euro/MWh compared to around 60 in France and Spain. In the United States, the gap is even greater. In Europe, gas is traded at 42 euros per MWh against 13 dollars in the US. Energy costs, then, are further burdened by European climate policies". Overall, this means that 'between direct and indirect costs for CO2 emissions, the chemical industry pays more than EUR 600 million in one year, a burden close to all the R&D costs of the sector that is not borne by non-European producers. In a 2030 scenario, the total cost could double to over EUR 1.5 billion,' Buzzella calculates.