VINACHEM

Trading in European chemicals company shares was subdued on Monday in the wake of the EU agreeing a trade deal with the US, with trade group VCI claiming the proposed tariffs are too high for the sector.

US President Donald Trump and European Commission President Ursula von der Leyen on Sunday agreed a deal to cut proposed tariffs on EU exports to 15% from the 30% duties previously set to come into effect this week.

The EU has also committed to purchase $750 billion-worth of US energy products, including liquefied natural gas, oil and nuclear fuels.

The scale of the increase in purchasing such an escalation would require would be fairly difficult to achieve in the next few years, according to ICIS director of energy and refining Ajay Parmer.

“The EU is unlikely to be able to meet the level of purchases of US energy outlined in this latest deal. To have crude purchases meet just half of the required $250 billion/year energy purchases, the EU would need to more than double its US oil purchases,” he said.

“This is unrealistic, due to the huge shift in trade flows required, and is highly unlikely to come to fruition in the next few years,” he added.

The bloc is also expected to invest a further $600 billion on unspecified investments on top of current investment levels, US President Donald Trump said in Scotland on 27 July.

“We are agreeing that the tariff straight across for automobiles and everything else will be a straight-across tariff of 15%,” Trump added.

The single 15% tariff rate is all-inclusive, according to von der Leyen, meaning no additional duties are expected to be applied on top of that for any sector.

The parties have agreed to exempt certain sectors from the tariffs entirely, including natural resources, aircraft, semiconductor equipment and “certain chemicals”, von der Leyen said, without specifying what products may be exempt in the space. 50% US levies on European aluminium and steel remain.

The European Commission had not responded to requests for comment at the time of publication.

In a speech on Sunday, von der Leyen expressed hopes that the deal would provide sufficient clarity to dispel the pall of uncertainty that has hung over investment decisions and purchasing habits over much of 2025.

“Today with this deal, we are creating more predictability for our businesses. In these turbulent times, this is necessary for our companies to be able to plan and invest,” she said.

While a 30% cliff face – sufficient to effectively prohibit trade, according to Commission ministers – has been avoided, market reaction has been muted so far. France’s CAC 40 index was trading up 0.08% compared to Friday’s close in early afternoon trading, while Germany’s DAX fell 0.28%.

The STOXX index of listed European chemicals players was also trading slightly down on Monday, 0.38% below Friday’s close, with the bulk of companies in the index trading modestly down.

BASF and Solvay saw the sharpest falls, with shares trading down 1.82% and 2.1%, respectively.

While narrowly avoiding more substantial tariffs on EU exports and the introduction of countermeasures by the Commission that could have seen further escalation from the US, the resolution falls short of a win for Europe, according to Belgian Prime Minister Bart de Wever.

“This is a moment of relief but not of celebration,” he said.

Germany-based chemicals trade group VCI concurred, stating that the current projected level of tariffs is too high for the sector.

“Anyone who counts on a hurricane is grateful for a storm,” said VCI managing director Wolfgang Grosse Entrup.

“Nevertheless, the price for both sides is high. Europe’s exports are losing competitiveness. The US customers pay the tariffs,” he added.  – Source: ICIS