Chemicals supply chain experts call for clarity on tariffs at WPC

This content is part of the WPC 2025 series, in which we explore key themes from the 40th annual World Petrochemical Conference.

While much is still unknown about the potential impacts of new tariffs on shipping flows, Port of Houston infrastructure expansion is already being directly affected by new import duties on steel, Port of Houston Chief Commercial Officer John Moseley said March 20.

As Port of Houston invests upwards of $2.5 billion on infrastructure, another 10 ship-to-shore cranes have been ordered to accommodate growth, Moseley said during a discussion at the World Petrochemical Conference in Houston. The new aluminum and steel tariffs will significantly impact the cost of adding these new cranes, which cost $45 million apiece, he said.

A US 25% tariff on all steel and aluminum imports took effect March 12, triggering countertariffs from some of the US' largest trading partners.

"When you think about tariffs on steel and the impact on that cost, you're looking at a 25% increase to us on those cranes ... that's quite a bit of capital that now needs to get shifted or moved or something else that might be impacted," Moseley said.

Most ports provide concessions to third party companies to operate their terminals, while the Port of Houston operates its two container terminals itself, he added. Port officials are looking at the southeast Houston area near Baytown and La Porte as a site for a new, third container terminal, with more details to be announced soon, Moseley said.

More questions than answers on tariffs

Hundreds of billions of dollars' worth of chemicals exports move through US ports every year, as well as imports of feedstocks not otherwise available in US, said Maren Schroeder, president of Stolt Tankers.

"When you look at the magnitude, this is really the second biggest export sector," she said.

The proposed import duties are not something any carrier can absorb, and so those costs are likely to be passed on to customers and end-users, Schroeder added.

"Once we have clarity, we will prevail and make it work," she said.

Meanwhile, most shippers have adopted a wait-and-see approach in terms of shifting trade flows while market players await clarity around the scope and impact of any tariffs, both those proposed by the Trump administration that would take effect in April and any retaliatory tariffs issued by other nations.

Supply chains take a decade or longer to fully shift, and long-term conversations around friend-shoring and reshoring are still happening even with the tariff uncertainty, said Laura Robb, editor at S&P Global Energy Journal of Commerce.

On the Mexican side regarding tariffs, the government is expected to try to better control how many non-Mexican citizens are crossing into the US from within Mexico, Evonik Mexico President Martin Toscano said. Talks between the two countries have been ongoing around border security, a key issue involved with imposition of tariffs.

"The US administration was very clear what they expect from the Mexican authorities: They want a long-term plan, not just isolated actions," Toscano said.