German Chemical Industry Navigates Tariff Turbulence

Germany's chemical industry experienced a 1.8% increase in quarterly sales, driven by higher consumer demand and advance buying by U.S. clients, according to a report by industry association VCI released on Tuesday. However, ongoing negative market sentiment continues to challenge the sector's stability, with rising production costs, bureaucratic hurdles, and a stagnant economy weighing heavily.

The industry's sales climbed to 54.8 billion euros ($61.73 billion) in the first quarter, marking a 4.4% growth from the previous quarter, VCI reported. Despite market uncertainties, the association maintains its annual forecasts for the nation's third-largest industry, buoyed by early-year demand as buyers secured supplies prior to the imposition of tariffs by President Trump's administration.

Amid signs of potentially escalating trade conflicts, VCI warned of incoming pressure from increased Chinese imports due to tariffs, alongside the dampening of investment optimism globally. However, potential positive developments, including the introduction of a growth package by the German government and the resolution of trade issues, could foster a more favorable outlook for the industry, as highlighted by VCI President Markus Steilemann.

(With inputs from agencies.)