Petrochemical plants across China are halting production earlier than usual before the Lunar New Year holiday, as uncertainty over potential U.S. tariffs weighs on Asian chemical markets, according to industry monitor ICIS. The temporary shutdowns, beginning two weeks before the traditional holiday period, reflect mounting concerns about U.S.-China trade tensions.
Demand has softened for several key chemicals including oleochemicals and plastic resins ahead of China's Lunar New Year holiday from Jan. 28 to Feb. 4, ICIS reported.
U.S. President Donald J. Trump has threatened to impose tariffs as high as 60% on Chinese goods, leading many end users of key petrochemicals to ramp up production before the tariffs take effect.
This has led to early shutdowns as the plants have already met their contractual obligations, ICIS reported.
Fears over potential U.S. tariffs are spreading beyond China, rattling chemical markets in Canada and other trading partners, as CNBC reported on Jan. 22. Trump has threatened to impose a 25% tax on imports coming from Canada and Mexico.
During a rail strike in Canada last August, American Chemistry Council CEO Chris Jahn noted that “the chemical supply chains of the U.S. and Canada are intertwined.”
The United States imports about $25 billion in chemicals from Canadian partners annually, Jahn noted. In 2023, U.S. firms sold more than $28 billion in chemicals to Canada, he added.
