EU publishes tariff regulation, swings doors wide open to duty-free US plastics

The European Union has published Regulation (EU) 2026/1455 in the Official Journal, completing the final legal step needed to implement the EU-US tariff agreement. Under Article 8 of the regulation, it enters into force on the day following its publication and applies from July 1 2026 until December 31 2029.

The regulation sets EU customs duties at 0% for a wide range of US industrial goods. Chapter 39 (Plastics and articles thereof) is included in Annex I without exemptions, meaning US-origin polymers will benefit from duty-free access to the EU market from 1 July. The measure is expected to improve the competitiveness of US materials, particularly polyethylene, and could gradually reshape polymer trade flows into Europe.

The European Commission will have the authority to suspend the tariff preferences if imports from the US cause or threaten serious injury to EU producers or if the US fails to meet its commitments under the agreement. The Commission will also monitor the regulation’s impact and report regularly on changes in trade volumes and import values during its application period.

US PE cements its position as Europe’s dominant supplier

The tariff elimination is particularly significant for PE given the United States’ already dominant position in the European market.

According to ChemOrbis Stats Wizard, the US accounted for approximately 40% of the EU27’s total PE imports (excluding intra-trade) in 2025, which is a record high, comfortably ranking as Europe’s largest external supplier and far outpacing Saudi Arabia (18%) and South Korea (10%).

The importance of the agreement is equally significant from the US perspective. In 2025, US exported a record high of 15 million tons per annum PE. Europe overtook China to become the largest destination for US PE exports, having 15% share. Mexico, which is a duty-free access market for US PE, ranked second, while shipments to China slipped as China’s rapidly expanding domestic capacity continued to curb import demand.

The United States’ position is even stronger in several individual grades. US-origin material represented around 65% of the EU’s metallocene LLDPE imports, making the country by far the dominant supplier in this segment. It also accounted for approximately 37% of LDPE imports, 30% of HDPE imports and around 20% of LLDPE imports, underlining its strategic importance across virtually the entire PE chain.

With customs duties now eliminated, US suppliers gain an additional pricing advantage in a market where they already occupy a leading position.



PE stands out, but the benefits extend across Chapter 39

The commercial impact is expected to be most pronounced in PE particularly HDPE and LLDPE because of the United States’ already dominant position in European imports. The removal of customs duties is expected to improve the competitiveness of US-origin material in other polymers as well.

PP

The second beneficiary product will be polypropylene (PP). Even though the US does not have the competitive advantage in PP as it has in PE, it exported around 2 million tons per annum PP last year. EU share in US exports was %6 in 2025 after Mexico (53%) and Canada (24%). Now that tariffs are eliminated into the EU market in July, a third duty-free access market will be opened for US origin PP for the second half of 2026.

Engineering polymers

US’ third export power is in engineering polymers, where they exported more than 1.1 million tpa last year. The EU’s share in overall exports was 12% followed by Mexico, Asean and China.

PVC: ADDs keep the door closed

Although PVC is included in Chapter 39 to benefit from duty-free access for US cargoes into the European market, the anti-dumping duties of 58- 77% applied by the EU on US-origin PVC are likely to keep the door closed.

A new chapter begins: A rocky road ahead for Europe’s competitiveness

The agreement arrives at a particularly sensitive moment for Europe’s petrochemical industry.

European producers continue to struggle with structurally high production costs, subdued demand and shrinking operating margins while navigating an ongoing rationalisation wave. At the same time, global PE markets remain burdened by persistent oversupply, with new capacities continuing to start up across the board.

For converters, the agreement promises broader sourcing opportunities for their raw materials, greater supplier diversity and improved import economics. However, they will face dual competitive pressures from semi or finished plastic goods under Chapter 39. Thus, they will not fully benefit from this agreement as the European Plastics Converters (EuPC) addressed the agreement as a direct threat to Europe’s plastics converting industry and the 1.6 million jobs it supports.

For producers, meanwhile, it raises the competitive bar even further. As Europe becomes an increasingly attractive destination for surplus US PE, regional suppliers are likely to face mounting pressure from lower-cost imports at a time when margins are already under strain.