Foreign trade: BASF hopes for open world markets after a possible Trump victory

The unsettled world situation makes long-term planning difficult for global corporations like BASF. The chemical giant’s involvement in China is also not out of the headlines.

BASF CFO Dirk Elvermann is also hoping for open world markets after a possible victory for Donald Trump in the US presidential election in November.

“We need a strong USA, which, due to its importance, has a special responsibility for free trade and the global economy,” said Elvermann (52) in an interview with the news agencies dpa-AFX and dpa. “I hope that whoever is elected can ensure that in the end.” The world’s largest chemical company is watching closely. “We will continue to secure, continue and expand our US business.”

The USA is an extremely important market for BASF with more than 100 of its own locations and around 13,000 employees. Sales in the USA were over 20 billion euros in 2022.

Experts fear that transatlantic relations could deteriorate significantly under a US President Trump. In his first term in office, Trump dealt with Europe in a way that was less based on a common basis of values, said historian and political scientist Liana Fix from the Council on Foreign Relations, an independent think tank in Washington.

Growth rates in China are slowing

In general, uncertainty in the world is increasing, said Elvermann. “This is of course a challenge for a company with a global footprint.” This also applies to the chemical company’s billion-dollar investments in China. BASF also sees that the growth rates in the giant country are currently slowing down. “But we took that into account when making our investment decisions. We do whatever hedging you can do if you make a large investment in the country. Of course, a residual risk remains – as with any foreign investment.”

Part of the security is that BASF manufactures in China for the local market. “That means we’re not building an export location there, but rather a China-for-China investment. That gives us a certain level of security when it comes to transport routes, logistics and sales.” In addition, the group finances the entire business locally. “The idea that we are transferring funds from Europe or anywhere else to China is wrong.”

BASF assumes that around 80 percent of global chemical production growth will be generated in China by 2030. “As a global chemical company, we want and must take part in this,” said Elvermann. The group is represented in China with 15 percent of sales and is aiming for around 20 percent by 2030. “We are traveling very appropriately.”

Just a few days ago, the group announced that it would sell its shares in two joint ventures in Korla, China. “Regular due diligence measures, including internal and external audits,” did not reveal any evidence of human rights violations in the joint ventures. Nevertheless, reports contained serious allegations pointing to activities “that are not compatible with BASF’s values.”