Chemical Industry Mostly Spared as Trump Pivots to Section 122 Tariffs After Court Ruling
Photo by Anthony Maw on Unsplash
Chemical Industry Mostly Spared as Trump Pivots to Section 122 Tariffs After Court Ruling
What Happened
On February 20, the Supreme Court struck down the Trump administration's use of the International Emergency Economic Powers Act (IEEPA) to impose sweeping tariffs. Within hours, the administration pivoted to Section 122 of the Trade Act of 1974, imposing new 10% tariffs under a legal authority that allows "import surcharges of up to 15 percent" to address balance-of-payments deficits. The catch: Section 122 tariffs carry a 150-day time limit.
For the chemical industry, the key development is what's on the exemption list. Energy products, pharmaceuticals, ethylene-based polymers, nylon resins, and titanium dioxide pigments are all exempt from the new duties. This represents a significant carve-out for the sector.
Why It Matters for Chemical Supply Chains
The chemical industry's partial exemption reflects its role as a foundational input to manufacturing. Tariffs on bulk chemicals would ripple through agriculture, construction, automotive, and consumer products. Policymakers appear to have recognized this, at least for now.
However, the exemption landscape has already shifted once. In September 2025, the administration removed exemptions on select products including polyethylene terephthalate (PET) and silicones, citing severe global oversupply from Chinese manufacturing capacity. This precedent means current exemptions are not guaranteed to hold.
The 150-day clock on Section 122 tariffs adds another layer of uncertainty. The administration will need either congressional action or a new legal basis to maintain duties beyond that window.
Key Numbers
- 10% tariff under Section 122, replacing the struck-down IEEPA duties
- 150-day limit on Section 122 authority before congressional action is needed
- US chemical exports fell 3.0% to $166 billion in 2025 (excluding pharmaceuticals)
- Chemical imports declined 10.1% to $128 billion in 2025
- US total imports rose 4.6% to $3.4 trillion; exports rose 5.7% to $2.2 trillion
The broader trade picture shows chemicals bucking the overall trend. While total US imports grew, chemical imports dropped sharply — suggesting that tariff uncertainty and supply chain restructuring were already affecting purchasing decisions well before the Supreme Court ruling.
What Chemical Buyers Should Watch
- Track the exemption list — Products have been added and removed from exemptions before; PET and silicones lost their exemptions in September 2025
- Plan around the 150-day window — Section 122 tariffs expire unless Congress acts; procurement teams should prepare for both scenarios
- Evaluate domestic sourcing — Chemical trade groups are pushing for "predictable trade policy" to support domestic manufacturing; domestic sourcing reduces tariff exposure
- Monitor Southeast Asian suppliers — Some countries in the region have emerged as alternative sources as buyers reroute around tariffed origins
- Review contracts with tariff pass-through clauses — Ongoing tariff volatility means existing supply agreements may need adjustment
Alliance's Take
Tariff volatility is one more reason domestic chemical sourcing matters. Alliance Chemical operates from the United States, which means our customers avoid import duties, customs delays, and the supply chain uncertainty that comes with cross-border procurement. When tariff rules change overnight — as they did on February 20 — domestic supply keeps operations running without disruption.
We supply a full catalog of solvents, acids, cleaning solutions, and laboratory chemicals with competitive pricing and complete documentation. Every order includes Safety Data Sheets and Certificates of Analysis as standard.
Looking to reduce tariff exposure or evaluate domestic sourcing options? Contact us at sales@alliancechemical.com for product availability, pricing, and supply planning support.
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