Asian chemical shares soar after Trump pauses tariffs

SINGAPORE (ICIS)–Asian chemical shares soared on Thursday after US President Donald Trump announced a 90-day pause for countries hit by higher tariffs.

However, the trade war with China has escalated after Trump at the same time increased tariffs on goods from China to 125%, accusing Beijing of a “lack of respect” after it retaliated by saying it would impose tariffs of 84% on US imports set to begin on Thursday.

Trump had previously imposed 104% tariffs on Chinese imports.

By 01:00 GMT, Japanese producers Asahi Kasei and Mitsui Chemicals rose by 5.88% and 8.27% higher, respectively in Tokyo, while LG Chem was up by 5.41% in Seoul.

Malaysian producer PETRONAS Chemicals Group (PCG) was up by 7.86% in Kuala Lumpur while palm oil and oleochemicals major Wilmar International rose by 2.29% in Singapore.

Japan’s bellwether Nikkei 225 rose by 8.36% to 34,297.27 while South Korea’s KOSPI Composite was up by 4.64% at 2,400.23.

Overnight, US-listed shares of chemical companies skyrocketed with the S&P 500 jumping more than 9% after Trump’s announcement while the Nasdaq Composite Index jumped by the most since 2001.

Trump said he was authorizing a universal “lowered reciprocal tariff of 10%” as negotiations continued, with the reversal coming around 13 hours after higher duties on some 60 countries and the EU took effect.

“It isn’t immediately clear which trade partners will receive this tariff relief,” Japan’s MUFG Research FX strategist Llyod Chan said.

“Given most Asian economies have not retaliated against the US, we believe they could be among the recipients of this tariff relief.”

Despite the tariff easing, global trade uncertainty remains very high, given the unpredictability of Trump’s protectionist policies, Chan said.

“This will likely continue to weigh on business confidence, putting investments on hold as firms wait for clarity about US trade policies.”

Visit the ICIS Topic Page: US tariffs, policy – impact on chemicals and energy.