U.S. Tariff War: 90 Days Later — Deep Dive into Chemicals, Materials & Energy Sectors

Policy Snapshot

• July 9, 2025 marks the end of the 90-day grace period for new U.S. tariffs announced in April.

• The U.S. has confirmed tariffs of 25%–40% on goods from 14 countries (including Japan, South Korea, Germany, and Malaysia).

• A 50% import tariff on copper will take effect August 1.

• Further tariffs on semiconductors and pharmaceuticals are under consideration.

Industry-Specific News & Analysis

Chemicals Industry

Rising Costs

• U.S. buyers of specialty and basic chemicals face 8–15% cost increases due to new duties on imports from Asia and Europe.

• Key affected segments include isocyanates (MDI, TDI), polyether polyols, epoxy resins, coatings, and electronic chemicals.

Supply Chain Shifts

• Multinational firms are exploring "China+1" sourcing, regional diversification, and on shoring U.S.-based production to mitigate tariff exposure.

• Small-to-mid-sized chemical exporters are under pressure due to limited pricing power and fewer supply chain alternatives.

Downstream Pressure

• Packaging, consumer goods, and automotive sectors using polymers like PE, PP, and engineering plastics will feel inflationary strain and possible demand softening.

Materials Industry

Copper Tariff Shock

• A proposed 50% copper tariff sent COMEX copper futures soaring 13% in a single day — the largest spike since 1968 (WSJ).

• Industries including construction, electronics, EVs, and renewables are bracing for higher input costs and supply volatility.

• Potential for pricing distortion across LME–COMEX spreads, as buyers shift away from Asian suppliers.

Advanced Materials & Semiconductors

• Tariff risks extend to semiconductor-grade materials like polyimide films, CMP slurries, and electronic resins, mainly sourced from East Asia.

• Firms are accelerating ASEAN investment and regional manufacturing hubs to maintain U.S. market access.

Sustainable Materials

• Collaboration-dependent bio-based or recycled materials may face rollout delays due to cross-border friction.

Energy Industry

Raw Material Risk

• U.S. may soon target critical minerals (lithium, rare earths) and battery components, which are crucial for clean energy transition.

• Import dependency could delay or cancel solar, wind, and battery storage projects as input costs rise sharply.

Oil, Gas & Petrochemicals

• While oil & gas are not currently targeted, the copper tariff affects refining equipment, power grids, and cracking plants.

• U.S. shale and LNG remain relatively insulated, but capex plans may be revised down.

Renewable Energy Deployment at Risk

• Major developers are reassessing timelines for solar/wind farms due to soaring hardware prices.

• U.S. efforts to “reshore” solar panel and inverter production face timing and cost challenges.

Strategic Recommendations

Stakeholder	Recommended Actions
Chemical & Material Companies	- Diversify raw material sources - Invest in local/regional manufacturing - Seek tariff exemptions via legal or diplomatic channels
Energy Developers	- Frontload procurement of solar/battery inputs - Increase recycled/secondary material usage - Prepare for slower permitting and higher capex
Investors & Analysts	- Monitor copper futures & LME–COMEX spreads - Favor domestic-focused supply chain firms - Watch legislation limiting presidential tariff powers