ICIS - chemical podcasts Episode 1375: PODCAST: Chemicals sector downcycle could run and run
Aug 22, 2025
Paul Hodges, Chairman of New Normal Consulting, shares his expertise on the chemical industry and global economy. He discusses how political factors are reshaping global trade, leading to disruptions in supply chains. Hodges highlights the implications of demographic shifts and the impact of aging populations on market demands. The conversation reveals concerns about the ongoing petrochemical downturn and overcapacity, suggesting that the current down-cycle in the chemicals sector could continue for years to come.
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Tariffs Shift Trade Into Politics
- Paul Hodges warns tariffs have shifted policy from trade logic to political logic, raising US prices and reducing consumer choice.
- He argues this destroys global supply chains and will raise US inflation and slow its economy.
China's Rare Earths Give It Strategic Leverage
- Paul highlights China's leverage via rare earths, which undercuts extreme US tariffs and limits US industrial replacement options.
- He says US firms may withdraw from Europe and concentrate production domestically, reshaping supply chains.
Car Industry Shows Tariff Fallout
- Paul uses the car industry to illustrate tariff impacts: around 40% of car components now face tariffs, raising car prices.
- He explains this reverses decades of integrated North American production under NAFTA/USMCA.