Insight
Trump tariffs: value chain impact
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Report summary
The USA announced new 25% tariffs on Canada on January 31, 2025. This was quickly followed by a monthly pause, and the tariffs entered in force on March 4, 2025. Canada promptly retaliated with 25% tariffs of its own on the goods from the USA. On March 6, the tariffs for Canadian goods were paused for those that are covered by USA-Mexico-Canada Agreement (USMCA), but Canada left their retaliatory tariffs in place until all the new tariffs are eliminated. This has impacted many value chains that are integrated across the border in the assumption of trade agreements such as USMCA remaining in force. We have already considered the impact of these tariffs on petrochemicals in general and on the polyamide industry in particular. Let us consider the consequences when a product is produced in Canada from raw materials made in the USA, and a significant portion of the product is then exported back to the USA. We will look at a polyamide-6,6 plant in Canada as an example.
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