As the foundations of globalization begin to shake, companies across the chemicals sector are rethinking their operating models. In the interest of absorbing ongoing shocks, many are shifting away from traditional low-cost, globally integrated systems in favor of more regionally resilient strategies. “The U.S.-China trade war, pandemic- induced supply chain crises and inflation partly due to the Ukraine war have pushed companies to reshoring or nearshoring production,” explains Christian Hartel, president and CEO, Wacker Chemie AG. Reshoring, dual sourcing and shifting production closer to demand are no longer backup plans—they’re becoming standard practice. For some, the move has already proven its worth. “Our business model has evolved in response to globalization and shifting manufacturing patterns,” says Aloke Lohia, founder and group CEO, Indorama Ventures. “This regional approach helped us during the COVID-19 pandemic, when the supply chains broke down. We were able to meet demand locally, while many others faced challenges.”
But operational shifts are only half the battle. Companies operating across Asia, Europe, North America and Latin America now face a messy regulatory patchwork. The EU’s Green Deal, the U.S.’s push for energy independence and Asia’s divergent standards are making compliance more expensive, more complex and more fragmented. Succeeding in this environment means adapting fast to local rules, without losing global focus.
Tariffs are also adding friction at every step of the value chain. Once background noise, trade policy is now a live risk to margins, competitiveness and long-term investment. For Marcello Boldrini, CEO, Kraton Corporation, they are a major concern: “especially with new trade policies potentially reshaping the industry. While they aim to level the playing field, they could create barriers between regions like Europe, the U.S. and China. A balanced, global approach is crucial to maintaining competitiveness while advancing sustainability.” Greg Moffatt, president and CEO, the Chemistry Industry Association of Canada (CIAC), concurs: “Tariffs on imports from the U.S. are essentially taxes, increasing costs for individuals and businesses. It raises input costs for manufacturers, ultimately impacting consumers.”
Still, not everyone shares the concern. Jennifer Abril, president and CEO, SOCMA, remains optimistic that the new administration will support domestic production with strong incentives. “Certainty in trade and tax policies will encourage further investment and growth in the U.S. specialty chemical sector.” Even in this climate of disruption, the industry is turning the page. A new identity is taking shape—rooted in innovation, climate leadership and technical reinvention. Breakthroughs once seen as future bets are now core to strategy: low-carbon process chemistries, advanced recycling, bio-based materials and AI-powered manufacturing. “Green chemistry, decarbonization and the circular economy have evolved beyond mere regulatory requirements to become central pillars of business strategy,” explains Roberto Ramos, CEO, Braskem.
For instance, Bryan Kitchen, CEO of Ascent Industries Co., sees upside in the anticipated rise in domestic oil and gas production under the second Trump administration. He is confident that the shift toward bio-based solutions is accelerating: “What’s particularly exciting is the growing preference for more sustainable chemistries over traditional petrochemical options. Our bio-based chemistries are well-positioned to meet this shift.”
Ascent’s defoamers, for instance, have transitioned from being 100 percent petro-based to up to 81 percent vegetable-based and renewable. Yet progress is constrained. Uncertainty around trade flows and policy signals continues to chill investment, even for companies ready to make moves. “Global trade uncertainty is another factor—uncertainty in trade flows makes it difficult for companies to commit to major investments,” notes Mark Plamondon, executive director, Alberta’s Industrial Heartland Association.