The Biden administration’s April 2 decision to reinstate and sharply raise tariffs — in some cases up to 145% — on a swathe of Chinese imports has stirred ripples across the U.S. chemical sector, reigniting uncertainty in markets already contending with volatile pricing and supply chain recalibrations.

While the latest measures, detailed in Annex 2 of the USTR’s update, spared some specialty chemicals and pharmaceutical ingredients, they swept up several industrial inputs key to American manufacturers — many of which the U.S. heavily sources from China. Among the affected products: lactic acid, oxalic acid, acetic acid, and choline chloride — widely used across nutraceuticals, fertilizers, and petrochemical derivatives.

According to real-time data tracked by ChemAnalyst, prices responded unevenly. Some exempted products like Vitamin C saw sharp declines, down over 28% between February and April, while tariff-hit chemicals such as tartaric acid and bromine posted increases of over 3% to 7%, driven in part by cost pass-throughs and speculative stocking. The response underscores not just the sensitivity of chemical markets to policy shifts, but also the asymmetrical dependencies the U.S. maintains in its supply chain.

This report analyzes nine critical chemical categories — from nutraceuticals to APIs and petrochemicals — to assess how the trade war is materially influencing prices, procurement behavior, and sourcing strategies across the sector.

Pricing Map – Winners, Losers and Surprises

The impact of U.S.-China tariff shifts on chemical imports has played out unevenly across the board. Despite exemptions on several vitamin derivatives and specialty compounds, real-time pricing data from February to April 2025 reveals a mixed bag of outcomes. Here’s a snapshot of the movement:

Product Category	HS Code	%Change in prices (from February to APril 2025)	Tariff Status
Vitamin B6-Nutraceuticals	29362500: Vitamin B6 (Pyridoxine and related compounds with Vitamin B6 activity) and its derivatives, unmixed, natural or synthesized.	3.30%	Exempted
Lactic Acid-Nutraceuticals		-6.64%	Not Exempted
Vitamin B12- Speciality Chemical	29362600: Vitamin B12 (Cyanocobalamin and related compounds with Vitamin B12 activity) and its derivatives, unmixed, natural or synthesized	-0.84%	Exempted
Vitamin C- Speciality Chemical	29362700: Vitamin C (Ascorbic acid) and its derivatives, unmixed, natural or synthesized	-28.14%	Exempted
Vitamin E- Speciality Chemical	29362800: Vitamin E (Tocopherols and related compounds with Vitamin E activity) and its derivatives, unmixed, natural or synthesized	5.72%	Exempted
Bromine- Bulk Chemicals and Fertilisers		3.86%	Not Exempted
Acetic acid-Petrochemicals		-11.50%	Not Exempted
Benzoic Acid-Petrochemicals		-2.59%	Not Exempted
Progesterone- Pharma API	29372310: Estrogens and progestins obtained directly or indirectly from animal or vegetable materials	0.65%	Exempted
Oxalic acid- Speciality Chemicals		-5.01%	Not Exempted
Tartaric acid- Speciality Chemicals		7.16%	Not Exempted
Aniline: Petrochemicals		3.78%	Not Exempted
Propionic acid: Petrochemicals	29339902 2-[4-[(6-Chloro-2-quinoxalinyl) oxy]phenoxy]propionic acid, ethyl ester; and 1 other specified aromatic chemical	5.47%	Exempted
Butyric acid: Petrochemicals		2.19%	Not Exempted
Choline chloride (Vitamin B4): Nutraceuticals		2.07%	Not Exempted

Key Observations:

•  Surprise Decliner: amid all these tariff uncertainties and threats, Vitamin C prices (being exempted), plummeted by 28% — driven more by oversupply and weak downstream demand than trade actions.

•  Tariff Pressure: Tartaric acid, bromine, and aniline – all under new tariffs – posted gains of 3–7%, suggesting early-stage cost pass-through by importers.

• Exempted Climbers: Products like Vitamin E (+5.7%) and Propionic acid (+5.5%) defied expectations, possibly due to speculative buying or tightening supply from alternate sources.

• Downward Drag: Acetic acid fell over 11% despite being non-exempt, driven by soft demand and higher inventories offsetting tariff impact.

The mixed pattern reveals that while tariffs do influence landed costs, broader market fundamentals — including supply tightness, seasonal demand, and inventory cycles — continue to shape price behavior across chemical segments.

Deep Dive by Category – How Prices Shifted Under Pressure

a) Nutraceuticals & Specialty Chemicals

Vitamin B6 (HS: 29362500)

Price Change: +3.30%

Tariff Status: Exempted

Analysis: Vitamin B6 prices increased by 3.30%, driven by steady downstream demand in pharmaceuticals and nutraceuticals. Despite being exempt from tariffs, the market saw preemptive purchasing strategies, inventory management, and a mild increase in prices due to stable supply conditions. Stronger demand and cautious buying in anticipation of seasonal demand further stabilized the market, reflecting consistent consumption patterns rather than tariff-driven shocks.

Lactic Acid

Price Change: -6.64%

Tariff Status: Not Exempted

Analysis: Lactic Acid prices declined by 6.64% due to softer demand and excess supply. Not exempt from tariffs, Lactic Acid initially saw higher prices in February, spurred by front-loading amid tariff concerns. However, supply from China remained abundant, while demand across food, beverage, and pharma sectors softened, leading to price corrections. Although tariffs influenced the initial buying pattern, weak demand and excessive inventories led to the price drop.

Vitamin B12 (HS: 29362600)

Price Change: -0.84%

Tariff Status: Exempted

Analysis: Vitamin B12  saw a minor decline of 0.84%, mainly due to high inventory levels carried over from Q4 2024. Even though it remains exempt from tariffs, stable supply chains and steady demand from pharma and nutraceutical sectors kept prices stable. The market adjusted to excess inventory, with moderate consumption maintaining price levels, reflecting minimal volatility despite global uncertainties.

Vitamin C (HS: 29362700)

Price Change: -28.14%

Tariff Status: Exempted

Analysis: Vitamin C experienced a significant price drop of 28.14%, largely driven by oversupply and weak demand, despite being exempt from tariffs. Prices fell due to excess inventory and softer downstream demand. Although tariffs on Chinese exports contributed to supply disruptions, it was the market's response to excess stock and diminished demand that triggered this sharp price decrease, illustrating the mismatch between production and consumption.

Vitamin E (HS: 29362800)

Price Change: +5.72%

Tariff Status: Exempted

Analysis: Vitamin E prices rose by 5.72%, driven by tighter supply and stronger demand from the pharmaceutical and nutraceutical sectors. Despite tariff uncertainty, the exemption allowed for more stable imports. The growing demand for natural-source Vitamin E and increasing production costs contributed to upward price pressure, while logistical challenges from suppliers further added to price increases. This marked a bullish trend for Vitamin E in the U.S. market.

b) Bulk Chemicals and Fertilizers

Bromine

Price Change: +3.86%

Tariff Status: Not Exempted

Analysis: Bromine prices rose by 3.86%, influenced by supply constraints from China and rising tariff costs. Despite tariffs, steady demand in industries like flame retardants and water treatment helped stabilize the market. However, logistical disruptions and reduced Chinese production from the Shandong region put pressure on the supply chain, pushing prices up. The market remains sensitive to geopolitical tensions, which continue to affect procurement strategies.

Acetic Acid (Petrochemicals)

Price Change: -11.50%

Tariff Status: Not Exempted

Analysis: Acetic acid prices fell by 11.50%, driven by oversupply and weak demand, exacerbated by trade tensions. Tariffs on various imports, including acetic acid from China, contributed to price hikes initially, but a weak recovery in demand and ample supply led to price declines. Logistical issues, coupled with a low demand from sectors like automotive and construction, helped maintain downward pricing pressure despite tariff challenges.

Benzoic Acid (Petrochemicals)

Price Change: -2.59%

Tariff Status: Not Exempted

Analysis: Benzoic acid saw a 2.59% decline, primarily due to reduced demand and abundant inventories from pre-Lunar New Year shipments. Though tariffs impacted supply from China, they did not significantly alter the price trend. The market remained soft as cautious purchasing behavior and lower demand from key sectors kept pressure on prices, reflecting how supply dynamics and economic conditions overpowered tariff impacts.

Aniline

Price Change: +3.78%

Tariff Status: Not Exempted

Analysis: Aniline prices rose by 3.78%, reflecting tariff-induced price pressures. The imposition of tariffs, coupled with rising shipping costs and port congestion, contributed to higher import costs. The 10% tariff on Chinese imports exacerbated market uncertainty, resulting in stockpiling and a general upward trend in pricing. Despite weak downstream demand, the price rise was largely driven by geopolitical and logistical challenges.

Butyric Acid

Price Change: +2.19%

Tariff Status: Not Exempted

Analysis: Butyric acid prices saw a slight increase of 2.19%, primarily due to production disruptions and higher feedstock costs rather than tariffs. While tariffs influenced the cautious buying behavior, the primary market drivers were logistical disruptions, supply constraints, and inventory shortages. The lack of strong demand from food flavoring and animal feed sectors kept price increases relatively modest despite these challenges.

c) Pharmaceutical APIs

Progesterone (HS: 29372310)

Price Change: +0.65%

Tariff Status: Exempted

Analysis: Progesterone prices saw a slight increase of 0.65%, indicating market stability. As an exempted product, it avoided tariff-induced inflation, and the modest price uptick can be attributed to steady demand and balanced supply chains. This subtle increase was mainly driven by stable pharmaceutical consumption rather than any significant external factors, suggesting a neutral to soft market outlook.

In Short:

Exempted Products: Items like Vitamin B6, B12, C, E, and Progesterone demonstrated a varied response to pricing pressures. While some, like Vitamin B6 and E, saw price increases due to stronger demand and supply constraints, others, like Vitamin B12, showed stability due to well-managed inventories. This illustrates that beyond tariffs, factors like global demand and production costs played a pivotal role in price determination.

Non-Exempted Products: Chemicals like Lactic Acid, Acetic Acid, and Oxalic Acid experienced price declines, primarily driven by softer demand or oversupply, regardless of tariff status. While tariffs were expected to push prices up, other market dynamics, such as excess stock or subdued demand, led to price corrections.

Market Dynamics: The chemical industry’s pricing trends are influenced by a mix of factors, including tariffs, supply chain disruptions, production costs, and shifts in global demand. While tariffs have played a significant role in pushing up prices for some products, other factors such as inventory management, logistical challenges, and sector-specific demand have often been more influential in determining price movements.

Market Sentiment – Importers Weigh Options

Reactions from U.S. buyers: stockpiling, long-term contracts, shifting suppliers

In response to the United States' imposition of a 145% tariff on Chinese and Hong Kong-made goods previously exempt under the "de minimis" provision, U.S. importers have adopted several strategic measures to mitigate cost increases and supply chain disruptions.

Stockpiling

Anticipating the steep tariffs, many U.S. companies accelerated inventory purchases to shield themselves from impending cost hikes. Retail giants like Walmart and Target increased their imports significantly in the months leading up to the tariff implementation, aiming to secure products at lower costs before the tariffs took effect.

Long-Term Contracts

To stabilize costs and ensure supply continuity, some businesses engaged in long-term contracts with suppliers. This approach provided price predictability and secured product availability despite the tariff-induced market volatility. For example, companies like Lifetime Brands increased their inventory levels and entered into long-term agreements to mitigate the impact of potential tariffs.

Shifting Suppliers

In response to the tariffs, U.S. companies reevaluated their sourcing strategies, seeking alternatives to Chinese suppliers. Manufacturers like Steve Madden and Newell Brands reduced their reliance on China, opting to source products from countries such as Vietnam, Mexico, and Thailand to circumvent the high tariffs. This shift was part of a broader trend where 69% of executives planned to lessen their companies’ dependence on China, up from 55% in 2022.

These strategic responses underscore the proactive measures U.S. businesses are undertaking to navigate the challenges posed by the U.S.-China trade tensions and the resultant tariff impositions. Reactions from U.S. buyers: stockpiling, long-term contracts, shifting suppliers

U.S. Importers' Strategic Responses Post-Tariff Implementation

1. Stockpiling and Long-Term Contracts

In anticipation of increased costs due to tariffs, many U.S. importers have engaged in bulk purchasing and negotiated long-term contracts with suppliers. This strategy aims to secure favorable pricing and ensure a steady supply of goods amidst the uncertainty. Companies like Kuru Footwear have adjusted their supply chains, moving inventories from Canada to the U.S. to mitigate tariff burdens.

2. Shifting Suppliers and Diversifying Supply Chains

To reduce dependency on Chinese imports, U.S. businesses are increasingly sourcing products from alternative countries. Southeast Asian nations such as Vietnam, Thailand, and Cambodia are emerging as popular manufacturing hubs due to their cost-effectiveness and trade agreements with the U.S. Companies like Newell Brands have already transitioned a significant portion of their production to these regions.

3. Utilizing Foreign-Trade Zones (FTZs)

To alleviate the immediate financial impact of tariffs, some U.S. importers are leveraging Foreign-Trade Zones. These zones allow companies to defer or reduce duties on imported goods, providing temporary relief and aiding in cash flow management.

Import Substitution: The Role of Alternative Suppliers

In response to the trade war, U.S. companies are actively seeking suppliers outside China to maintain supply chain stability and cost-effectiveness:

Vietnam: With its proximity to China and established manufacturing infrastructure, Vietnam is becoming a preferred alternative for U.S. importers. The country offers competitive labor costs and favorable trade terms.

India: India is emerging as a viable option, especially in sectors like textiles and pharmaceuticals. However, challenges such as infrastructure and efficiency gaps compared to China need to be addressed.

Mexico: Proximity to the U.S. and existing trade agreements make Mexico an attractive option for nearshoring. Companies are increasingly establishing production facilities there to circumvent tariffs and reduce lead times.

This strategic shift is not just about cost savings but also about building more resilient and diversified supply chains.

Downstream Impact – End-User Industries Absorb or Pass On Costs

As of May 2, 2025, the U.S. imposition of a 145% tariff on Chinese and Hong Kong-made goods previously exempt under the "de minimis" provision has significantly impacted downstream industries such as pharmaceuticals, agrochemicals, coatings, and plastics. These sectors are grappling with increased costs, supply chain disruptions, and strategic shifts in production and sourcing.

Pharmaceuticals & Nutraceuticals: Navigating Tariff Exemptions and Cost Pressures

While many pharmaceutical ingredients remain exempt from the new tariffs, the industry faces indirect cost pressures. For instance, Vitamin B6 (HS Code: 29362500) saw a price increase of 3.30% from February to April 2025, despite its exemption status. Conversely, Vitamin C (HS Code: 29362700) experienced a significant price drop of 28.14% in the same period, indicating market volatility. Lactic Acid, not exempted from tariffs, decreased by 6.64%, suggesting demand-side adjustments or alternative sourcing strategies.

The broader pharmaceutical sector is also contending with potential supply chain disruptions. The complex nature of global pharmaceutical supply chains means that even exempted products can be affected by delays and increased logistics costs. Companies are exploring reshoring manufacturing operations to the U.S. to mitigate these risks, although this transition involves significant investment and time.

Agrochemicals: Balancing Tariff Impacts and Supply Chain Adjustments

Agrochemical inputs have experienced varied price movements in response to the tariffs. Bromine, not exempted, saw a 3.86% price increase, while Acetic Acid and Benzoic Acid, also not exempted, decreased by 11.50% and 2.59%, respectively. These fluctuations reflect the industry's efforts to balance increased import costs with alternative sourcing and inventory strategies.

Companies are reassessing their supply chains, seeking suppliers outside the tariff-affected regions, and considering stockpiling essential inputs to buffer against future disruptions. However, these strategies can lead to increased storage costs and require careful demand forecasting.

Coatings & Specialty Chemicals: Margin Compression and Strategic Responses

The coatings industry, heavily reliant on chemical imports, faces margin compression due to increased raw material costs. For example, Tartaric Acid, not exempted from tariffs, experienced a 7.16% price increase. Companies are exploring various strategies to mitigate these impacts, including diversifying suppliers, renegotiating contracts, and adjusting pricing models.

Some firms are also considering shifting production to countries not affected by the tariffs or increasing domestic production capacities. These approaches aim to reduce dependency on imports and enhance supply chain resilience.

Plastics & Petrochemicals: Facing Feedstock Cost Increases and Production Challenges

The plastics and petrochemicals sector is experiencing increased feedstock costs and production challenges. For instance, Aniline and Butyric Acid, both not exempted from tariffs, saw price increases of 3.78% and 2.19%, respectively. These cost pressures are prompting companies to evaluate their production processes and supply chain strategies.

Some producers are considering reducing production rates or temporarily shutting down facilities to manage costs. Additionally, firms are exploring alternative feedstock sources and investing in process efficiencies to offset the increased expenses.

Outlook – Pricing Trendlines into Q2/Q3

Pricing Forecasts:

Volatility is expected to persist in categories like tartaric acid, bromine, aniline, and choline chloride, where tariffs have already led to price increases of 2-7%, driven by cost pass-through and speculative buying. Conversely, prices may cool for products like acetic acid, lactic acid, and oxalic acid, as weak demand and high inventories offset tariff-driven inflation. Expect further declines in Vitamin C and Vitamin B12 due to oversupply and soft consumption trends, despite tariff impacts.

Policy Uncertainty:

The reinstated tariffs and potential for further U.S.-China trade escalations could disrupt markets further. There is a risk of new retaliatory measures from China, potentially targeting critical raw materials like rare earths or other chemical intermediates. Buyers should monitor the situation closely, especially regarding exemptions and potential tariff revisions, which could create further market instability.

Strategic Advice for Buyers:

•  Watchlist Chemicals: Focus on tariff-impacted chemicals like tartaric acid, bromine, and aniline for potential price hikes. Additionally, lactic acid and acetic acid should be monitored for further declines.

• Risk Exposure Points: Ensure to assess supply chain dependencies on China and alternative suppliers, particularly from Vietnam, Mexico, or India. Leverage long-term contracts and stockpiling where feasible to mitigate price fluctuations and ensure supply continuity.

• Monitor Policy Developments: Be prepared for policy changes or tariff reclassifications that could alter supply dynamics, especially in sectors like pharmaceuticals and agrochemicals.