Chemical execs struggle to assess tariff impacts

Amid a period of uncertainty that one executive calls a “fog,” chemical companies are doing damage assessment and honing their strategies to respond to the trade war that erupted a month ago. On April 2, the Donald J. Trump administration imposed a 10% duty on all major trading partners. More alarming for companies of all types, it also imposed 145% tariffs on goods from China, prompting that country to slap retaliatory tariffs on US products.One relief is that many chemicals, including polymers like polyethylene and petrochemicals such as phenol, are exempt from the new tariffs. Meanwhile, the Chinese government is said to be preparing a list of about 130 products from the US that it will exempt from its own tariffs. Those items may include ethane and certain grades of polyethylene.In recent conference calls with stock analysts to discuss first-quarter financial results, chemical executives were frank in describing their inability to make forecasts in the current economic environment. “I'm not sure if we can tell you what's going to be happening between now and the end of the week in either the macroeconomy or our own petrochemical industry,” Huntsman CEO Peter Huntsman told analysts on a May 2 call.Huntsman said he doesn’t expect double-digit declines in the output of chemical-intensive products like motor vehicles and aircraft. “However, I am seeing in the past few weeks suppliers panic and—in a world of great and changing uncertainties—lowering inventories, preserving working capital, and stopping supply chains,” he added. “I would see a scenario