— By Eric Culp — 

The ongoing shift in Washington’s foreign policy continues to rattle decades-old systems and trust among America’s allies, so European capitals are preparing to boost spending on defence and infrastructure as plastics groups in the US and Canada warn of trouble ahead.

After throwing Ukrainian President Volodymyr Zelenskyy out of the White House, US President Donald Trump said his country was pausing its support for Kyiv’s battle against a Russian invasion, which began just over three years ago. This unexpected volte-face from the US administration combined with Trump’s ongoing threats of slapping 25% import tariffs on some EU goods starting as early as 2 April has resulted in wide-ranging plans for countries on this side of the Atlantic to deal with the aftermath of these rapid changes in relations between America and Europe.

Related: Russian economy decelerates, Ukrainian plastics industry at standstill – Year-Ender

The European Commission has proposed a plan to borrow up to EUR 150 bn to lend to EU governments for their defence. Commission President Ursula von der Leyen explained that the funding would be part of nearly EUR 800 bn for militaries in the trading bloc and immediate support for Ukraine. “We are in an era of rearmament,” she said. “And Europe is ready to massively boost its defence spending.”

The news out of Brussels followed a German announcement of a scheme that would spend some EUR 1 tn on infrastructure and defence in Europe’s largest economy. This plan was presented by German Chancellor-apparent Friedrich Merz, a member of the centre-right Christian Democrats, who with Bavaria’s centre-right Christian Social Union are expected to form a grand coalition government with the centre-left Social Democrats of outgoing Chancellor Olaf Scholz.

Additionally, the UK has unveiled plans to spend GBP 1.6 bn (EUR 1.93 bn) on air defence missiles for Ukraine’s military.

After Trump delayed blanket 25% import fees on Canadian and Mexican goods, the measures took effect on 4 March, sparking strong condemnation from Ottawa and Mexico City. Members of the polymer industry are also expressing their concerns about the trade sanctions. 

“Tariffs are taxes and costs will rise, with consumers and businesses alike shouldering the weight of these tariffs at a time when cost-of-living is already high in both countries,” said Greg Moffatt, president and CEO of the Chemistry Industry Association of Canada (CIAC, Ottawa, Ontario; canadianchemistry.ca). “While a tariff and policy response from Canada is warranted, we must not lose sight of the pressing need to future-proof our economy.

“Increasing our economic competitiveness should be the guiding principle for all policy actions in the weeks and months ahead. We need all stakeholders in Canada to recognise and address the gravity of the changing economic landscape.”

Meanwhile in the country levying the tariffs, the lead industry group has voiced its worries. Matt Seaholm, president and CEO of the US Plastics Industry Association (Washington, DC; www.plasticsindustry.org) said the group “remains deeply concerned about the tariffs on Canada, Mexico, and China, and their impact on US plastics manufacturing and jobs. While we understand President Trump’s rationale, a competitive industry depends on policies that protect American manufacturing while ensuring stable supply chains. These tariffs will disrupt the movement of essential machines, products, and materials that keep American manufacturers running across sectors like healthcare, consumer products, and automotive.”