Europe’s Chemical Industry Reaction to US-Election Chemical Industry Searches for a New Relationship to the US
“Woken up in a different world” – The EU chemical industry, representing over 1.2million jobs and bringing 550 billion Euro to the EU economy, has voiced concerns about the uncertainties in the wake of 2016’s presidential elections…
With a portion of 22% of the of total EU chemical trade in 2015, the US is Europe’s biggest trading partner for chemicals, bringing 31.3bn Euro of EU exports, while providing 23.1bn Euro of EU imports. Now, the outcome of the presidential election has raised concerns about the future relationship between both markets.
“Today we have again woken up in a world that will be different to what most people expected. We have a new US President and, which is important, a Republican majority in both the US house and senate. Following the Brexit experience, it’s far from clear to say today what the impact of this will be”, expressed Marco Mensink, Director General of the European Chemical Industry Association Cefic.
“As we saw after Brexit, volatility on markets and uncertainty will prevail in the short term, but the longer term impact has yet to be determined. The uncertainty is the key issue. What we do know is that both climate policy and international trade will operate in a very different environment.”
During his campaign, Donald Trump emphasized that he would revise US trade policy with the intention to stop trade deal negotiations like the Trans-Pacific Partnership with Asian countries or the Transatlantic Trade and Investment Partnership (TTIP) with the EU. He also promised to repeal the Paris climate agreement on curbing greenhouse gas emissions as well as re-negotiating the North American Free Trade Agreement NAFTA with Canada and Mexico.
American chemical companies on the other hand could look forward to a more favorable tax policy and protection from overseas imports: Trump had suggested a future corporate tax reduction to 15.0% (from up to 35%) while introducing tax rates of 35.0% and 45.0% for products manufactured outside the United States and sold in the US market.
The association thus calls upon EU leaders to develop a relationship with the new US President as soon as possible and ensure that the partnership we have had, in terms of democracy, security and the economy, continues. The US and European chemical industry are closely linked and intensive trade partners. Europe’s views on energy, climate, chemical and trade policy should be rebalanced in this new world. Industry likewise will have to adapt, and will do so.