Tariffs: US IG Chem Sector Winners/Losers

We examined the effect of Trump’s Tariffs on US IG Chemicals’ performance and found widespread underperformance, particularly in commodity chemicals. We classified all the names within our coverage into sub-sectors. The sub-sectors we used included: Industrial Gas, Petrochemical, Chlor-Alkali, Fertilizer, Crop Science, and Specialty. We also took a look at the performance of just our coverage universe and the entire chemicals index as well as other groupings such as Non-US/CA/EU (ex-Russia) and South and Central America.

Tariffs are already starting to impact the market as it weighs the effects of disrupted trade patterns. Inflation is on the rise, and the Fed’s hands seem to be tied in relation to rate cuts. US chemicals are underperforming the Index by a wide margin, and risks appear to be tilted towards the negative.

For the period spanning 4/1/2025 to 4/4/2025, the time since Trump’s tariffs were announced, US IG Chemicals reported excess returns of -1.59%, which fell short of the Basic Industry excess return of -1.42% by 17 bps. US IG Chemicals also underperformed the overall BBB2 index excess return of -1.26% by 30 bps, and the overall IG index excess return of -1.09% by 50 bps.