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US tariff extension to reshape chemical sector supply chains

08 Jul '25
2 min read
 	US tariff extension to reshape chemical sector supply chains
Pic: Shutterstock

Insights

  • President Donald Trump has extended key US tariff measures to August 1, 2025, with new reciprocal rates ranging from 25 to 40 per cent on imports from countries including Japan, Korea, and Bangladesh.
  • The move aims to address the US trade deficit and will impact the chemical sector by increasing input costs and triggering sourcing shifts.

President Donald Trump has extended key US tariff measures to August 1, 2025, with new reciprocal rates ranging from 25 to 40 per cent on imports from countries including Japan, Korea, and Bangladesh. The move aims to address the US trade deficit and will impact the chemical sector by increasing input costs and triggering sourcing shifts.

US tariff extension to reshape chemical sector supply chains

In a significant development aimed at rebalancing US trade relationships, President Donald J Trump has signed an executive order to extend key tariff measures initially set to expire on July 9, with a new expiry date of August 1, 2025.

Accompanied by formal notifications to various trade partners, this move introduces revised reciprocal tariff rates on a range of imports, marking a renewed push to address the longstanding US goods trade deficit. Tariff rates range from 25 per cent to 40 per cent.

Countries and applicable tariff rates:

  • Japan – 25%
  • Korea – 25%
  • South Africa – 30%
  • Kazakhstan – 25%
  • Laos – 40%
  • Malaysia – 25%
  • Myanmar – 40%
  • Tunisia – 25%
  • Bosnia and Herzegovina – 30%
  • Indonesia – 32%
  • Bangladesh – 35%
  • Serbia – 35%
  • Cambodia – 36%
  • Thailand – 36%

Impact on chemical sector

  • Cost inflation on inputs: Countries like Malaysia, Indonesia, Thailand, Korea, and Japan are key suppliers of base chemicals, polymers, additives, and intermediates. These tariffs will directly increase procurement costs for US chemical producers.
  • API and intermediate imports affected: For pharma-linked chemicals and specialty inputs, countries like Bangladesh, Myanmar, and Cambodia play a supporting role.
  • Sourcing strategy overhaul: US importers may reduce dependency on Southeast Asian and emerging market suppliers due to cost pressure, shifting toward domestic production or alternative trade partners not subject to these tariffs.
  • The imposed tariffs may enhance the competitiveness of US chemical manufacturers, prompting a renewed focus on domestic production of specialty and bulk chemicals

This policy shift underscores a broader trend of trade-driven restructuring in the chemical value chain, prompting firms to re-evaluate global sourcing models and prioritise supply resilience over cost alone.

ALCHEMPro News Desk (VK)

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