EU countries to seek import curbs on chemicals, plastics, sources say

European governments are preparing to ask the EU to implement rarely-used trade protection measures to defend their chemicals and plastics sectors from inflows of cheap imports, primarily from China, according to sources. France, Italy, and Germany, the bloc's three largest economies, intend to submit requests for broader import quotas, or 'safeguards', within weeks.

The focus of these requests would be on polyethylene terephthalate (PET), epoxy resin, and glass fibres. While the EU currently has over 150 trade measures, including tariffs on narrowly defined products, it only has one set of safeguards targeting ferro-alloys and a separate system for steel. France has expressed general support for safeguard investigations into certain chemicals and plastics, citing the severe difficulties faced by the European chemicals sector.

Italy is also interested in an investigation into chemicals used across various sectors, including defence, automotive, energy, shipbuilding, and infrastructure. Germany, historically opposed to EU tariffs on Chinese electric vehicles, is now under pressure from its own chemical industry to adopt a tougher stance against China, its primary trading partner.

Safeguard requests can only be made by EU members and require a qualified majority vote of at least 15 countries representing 65% of the EU's population. Although the EU has historically been reluctant to employ safeguards due to concerns of protectionism, recent geopolitical shifts, US tariffs, and a growing trade deficit with China have prompted a reconsideration of this stance by Brussels.

The European chemical industry is currently experiencing its worst crisis in 30 years, with high energy prices, weak demand, and intense competition from China and Asian suppliers contributing to job losses in companies like BASF, Lanxess, and Wacker.