Government Regulation
September 4, 2025
Adnoc Covestro EU Probe Delayed
Adnoc says EU probe delays could jeopardize Covestro deal – reports
Sep. 04, 2025 10:00 AM ETCovestro AG (CVVTF) Stock, COVTY StockBy: Joshua Fineman, SA News Editor
Abu Dhabi’s Adnoc said the European Union competition regulator’s decision to temporarily halt its probe into the Covestro (OTCPK:CVVTF) deal could jeopardize the transaction.
“While we remain committed to pursuing a constructive path forward, the continuation of such an approach raises serious questions about the viability of this investment,” a spokesperson for XRG, the international investment arm of Adnoc, told Reuters and MLex in an email.
The European Commission was set to decide on the probe by Dec. 2, though it will now set a new deadline.
“We are deeply disappointed by today’s decision,” the spokesperson for XRG told the news outlets. “The Commission’s demands have strayed far beyond what is reasonable or relevant to this transaction, crossing into areas that are both disproportionate and invasive.”
Covestro shares fell as much as 11% on Thursday in Frankfurt.
The European Commission in late July announced it was starting an in-depth probe into Abu Dhabi National Oil Co.’s €11.7B (~$13.75B) acquisition of Covestro (OTCPK:CVVTF) (OTCPK:COVTY) under the European Union’s tough new foreign subsidy rules. The EC said it will investigate concerns that Adnoc’s state funding by the United Arab Emirates could allow it to behave in a way that interferes with fair competition across the bloc.
August 29, 2025
Customs Investigation
U.S. Customs accuses 23 importers in shipping scheme to evade duties
Sheila Long O’Mara //Executive Editor, Furniture Today//August 29, 2025
WASHINGTON – More than 20 mattress importers were part of a U.S. Customs and Border Protection investigation into illegal transshipment of goods to evade trade duties.
In an investigation that spans back to the spring of 2024, companies brought products into the U.S. through “evasion” and a “network of Chinese shell companies” funneling products manufactured in China through South Korea, Indonesia, Taiwan and Vietnam. CBP estimated that the scheme resulted in more than $250 million in revenue owed.
“Never before has CBP identified this many importers evading AD/CVD in a single consolidated EAPA investigation,” said Susan S. Thomas, acting executive assistant commissioner for CBP’s office of trade. “The revenue identified for collection exceeds $250 million, but this figure may increase as we uncover additional importers in the scheme.”
The evasion scheme, the government said, hinges on the lower duty rate in countries other than China. As an example, CBP pointed out that under the China antidumping order, duty rates were up to 1,731.75%, while the Indonesia Order carried a duty rate of 2.2%.
The CBP carried out port inspections, analyzed trade data and conducted “on-the-ground” verifications in Indonesia and Taiwan. As part of its investigation, CBP said it visited a number of the companies’ listed factories only to learn that the locations were not operational. In one instance, a factory was said to have been destroyed in a fire in 2023 and never rebuilt.
In its determination, CBP paints a picture of companies that have U.S. addresses that are in strip centers and other suspect locations. A quick Google search indicates one company’s address as the location of a restaurant, Bean Bandit, in Colorado Springs, Colo. Another has the address of a PostNet location in Denver. Some companies in the filing share an address, and a number of the companies’ U.S. addresses are in residential areas with two as neighbors.
Ten companies are listed with U.S. locations in Colorado, six in New Jersey, two in New York with a shared address, four in California and one in Houston.
Companies listed as part of the investigation include the following companies, some of which, the government says, are tied to a larger entity, Foshan Aiyi, previously investigated for transshipping. The companies cited are:
Alexand Inc., Alloech Inc., Anlowo Inc., Bentensh Inc., Calimoon Inc., Day Day Up Inc., Deluxe Home of USA Inc., Gemmeo Inc., Haiide Inc., Hondex Inc., Incoroy Inc., Inland Empire Decor Home Furnishing Inc., Lincody Inc., Lirachy Inc., Newland Technology Inc., Outlier Inc., Splendid Life Distribute Inc., Startown Inc., Sunshine International Inc., Vovyace Inc., Weekaly Inc., Wuleitex Inc. and Zozonid Inc.
Products from some of the companies are sold via Amazon, Wayfair, Walmart and other furniture retailers, according to an online search.
Earlier this year, the Department of Commerce and the U.S. International Trade Commission also published its continuation of the order from the 2018 antidumping case that resulted in duties on mattresses imported into the U.S. from China. The ITC said revoking the order would likely lead to continued or recurrent dumping and injury to the U.S. mattress market.
August 25, 2025
Furniture Tariff Investigation
Furniture Retailer Stocks Shaken Up by Trump Plan for Tariffs
By
Updated August 25, 2025
09:45 AM EDT
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Key Takeaways
- President Donald Trump said the administration would being a “Tariff investigation” of furniture imports.
- The president explained that after the 50-day study was completed, he would be putting tariffs on imported furniture.
- Shares of retailers that rely heavily on imports fell, while those with stronger U.S. manufacturing bases rose.
Shares of some big furniture retailers slumped Monday after President Donald Trump announced that he will soon be slapping tariffs on imported furniture.1
Trump wrote on his social media site, Truth Social, last week that his administration was beginning a “Tariff investigation” of furniture coming into the country, which will be completed in 50 days. After that, he would determine tariffs on imports “at a Rate yet to be determined.”
The president added that the move was designed to “bring the Furniture Business back to North Carolina, South Carolina, Michigan, and States all across the Union.”
Shares of retailers that rely heavily on imports, including RH (RH), Wayfair (W), and Williams-Sonoma (WSM), all slumped at the opening bell. However, Ethan Allen Interiors (ETD) and La-Z-Boy (LZB), which make more of their products in the U.S., saw their shares rise.
https://www.investopedia.com/furniture-retailer-stocks-shaken-up-by-trump-plan-for-tariffs-11796667
August 3, 2025
Brazil Anti-dumping Duties on Polyol
Polyol Prices Poised to Surge As Brazil Bars Cheap Imports
PUdaily | Updated: July 31, 2025
Brazil has joined the global wave of protectionist trade actions by imposing definitive anti-dumping (AD) duties on polyether polyol imports from China and the U.S., effective July 3, 2025, via GECEX Resolution No. 754. The measures cover polyether polyols with molecular weights of 300–4,500 g/mol and ≥90% purity, including blends, under NCM 3907.29.39. While some respondents, such as Wanhua, aimed to exclude “formulated” mixtures, authorities maintained a broad scope to ensure effective enforcement.
The decision followed a petition by Dow Brasil Sudeste, Brazil’s sole domestic producer, and a year-long investigation by SECEX under Decree 8058/2013, in line with WTO rules. The final ruling confirmed that dumped imports caused material injury to the local industry.
Comparative Historical Context
Brazil has deployed trade remedies in chemicals before. Most recently (May 2025), Brazil raised duties on suspension PVC from the U.S. to protect local resin producers. Like the polyol case, PVC-makers (Braskem, Unipar) petitioned against “artificially low” imports, leading to dramatic duty hikes. That PVC case shows how duties can swiftly shift supply chains: importers began sourcing from Egypt, Mexico or Taiwan instead of the U.S.. We expect polyol trade flows may likewise divert.
Internationally, anti-dumping on polyols is not new. For example, India has repeatedly investigated Chinese polyether polyols. In March 2024, India issued duties on Chinese Wanhua polyol and others, much like Brazil’s approach. This reflects global oversupply: China’s polyol exports have expanded rapidly, pressuring markets from Asia to Latin America. India’s experience shows similar concerns: domestic producers felt undercut by cheap Chinese polyol, prompting duties. On balance, Brazil’s action mirrors a worldwide trend where emerging industries use AD measures to defend local PU chemical sectors against aggressive imports.
Global Supply Chain Implications
The new Brazilian duties will reshape trade flows for polyether polyols. Imports from China and the U.S., which historically account for the bulk of Brazilian polyol intake, will become much more expensive. Market participants are likely to seek alternative suppliers. Possible candidates include producers in Southeast Asia or even domestic Mercosur neighbours. Analysts noted how Brazil’s PVC AD led buyers to Egypt, Mexico and Taiwan; a polyol case could see similar redirection. However, significant new sources may not exist in Mercosur: current heavy polyol capacity resides outside Latin America.
Logistically, trade routes could shift. Instead of U.S.-China barrel-ship shipments via the Panama Canal, we may see more long-haul deliveries from Asia or smaller traders from Europe. In addition, global suppliers might restructure contracts: for example, U.S. exporters facing high duties could redirect some tonnage to other markets, while Brazilian buyers may negotiate spot contracts. In short, Brazilian polyol imports will likely decline from China/US and either be replaced by other sources or simply shrink, causing tighter supply and longer lead times.
Higher duties also change the cost structure and competitiveness. Pre-duty, China and U.S. polyols were reportedly sold at substantially lower prices. Brazilian data cited in the resolution show U.S. import prices were consistently below Chinese levels, except briefly in Q1 of 2021. For instance, SECEX found U.S. polyol CIF prices were lower than those from China throughout the review period, with the U.S. share of imports around 30%. Post-duty, import prices effectively jump by the duty amounts, so Brazilian foam producers can expect steeply higher feedstock expenses. This creates inflationary pressure: Brazil’s mattress association (ABICOL) warned in April 2024 that combined AD and tariff measures could raise polyol costs and spark a chain of price hikes throughout foam manufacturing. They pledged to fight the measures politically and legally, stressing that protection should favour genuine Brazilian producers and not necessarily foreign-owned multinationals.
Impact on Brazil’s Domestic PU Industry
Domestic producers, primarily Dow Brasil Sudeste Industrial Ltda, stand to gain protected market share as imported polyols become less price-competitive. With China and the U.S. effectively sidelined, Dow may gain pricing power and expand sales volumes, though capacity constraints and the need for consistent quality remain challenges. While Dow and industry association Abiquim also lobbied to raise Brazil’s MFN tariff from 12.6% to 20%, GECEX rejected the request in November 2024 due to strong opposition from downstream users. As a result, only the anti-dumping duties were adopted. The mattress industry association ABICOL supported keeping the MFN tariff unchanged but remained active in the AD case, reflecting the sector’s mixed priorities. In the short term, domestic producers will likely raise prices closer to the new duty-inclusive level, though Brazilian polyol supply may remain tight.
Longer term, higher protected margins could spur new investment by existing or new producers. If economics are attractive, we may see either expansion of Dow’s plant or interest from global polyol makers, though global oversupply could dampen that. Higher local prices might also encourage some end-users to invest in modest in-house blending or to shift some formulations toward locally available chemistries.
Downstream Effects (Automotive, Furniture, Footwear, etc.)
Brazil’s foam-using sectors face the sharpest impact. Polyether polyols are key to flexible PU foam, used in mattresses, upholstered furniture, automotive seating and interiors, footwear, and more. Analysts warn that an immediate effect will be higher raw material costs for foam producers.
The mattress industry, represented by ABICOL, is especially vocal. In April 2024, it issued a bulletin noting that Dow’s petition claims dumping margins of 59% (China) and 31% (US) below domestic prices. ABICOL argued that imposing an AD duty (and higher tariffs) would “increase the price of Brazilian PU products and hurt the entire mattress sector”. It pointed out that Dow alone cannot satisfy even half of the national polyol demand, so restricting imports risks foam shortages. The association warned that Brazilian foam-makers would become vulnerable to competition from Mercosur neighbours who could supply final PU products without Brazil’s new import duties. In effect, ABICOL fears that the policy could transfer the raw material cost issue to a finished goods trade issue.
The automotive and shoe industries will also experience secondary impacts. Automakers and their seat suppliers may see foam sheet prices rise modestly, slightly increasing car production costs. Footwear uses some polyol-based PU; higher polyol costs could feed into minor cost hikes. While these sectors are less concentrated than mattresses, they rely on the same competitive market for raw foam. All told, consumers in Brazil may see higher prices for sofas, beds, car seats and certain shoes over the coming years. Economists note this will add upward pressure on Brazil’s inflation, 5.35% in June, which is already above the target of 4.5%.
Economic and Pricing Analysis
From a trade data perspective, the newly imposed anti-dumping duties are expected to significantly reduce imports of polyols from the United States and China. Before the investigation, Brazil’s polyol import volumes were on the rise, with official filings indicating that Chinese-origin imports grew by 29% more tonnage in 2024 compared to 2023. However, with final duties ranging from $1,408 to $1,469 per metric ton on Chinese exporters and $555 to $680 per metric ton on U.S. suppliers, these products are poised to become economically unviable in the Brazilian market.
Price-wise, domestic polyol will be repriced upward. The combined effect of duty and existing tariffs means the import cost could double for many suppliers. Dow and any other suppliers will likely take advantage, and foam producers will pass on much of the costs.
Given foam’s share in final products, macro effects are muted but visible. Furniture inflation could tick up, as could mattress prices. Brazil’s IPCA inflation index may see a small bump from higher intermediate chemical costs. The central bank will likely monitor any ripple into consumer prices. Notably, one risk is that high domestic polyurethane prices incentivise cross-border shopping or grey-market imports from Uruguay/Argentina using Mercosur free-trade, adding uncertainty to enforcement.
Outlook and Monitoring
The duties took effect immediately on 4 July 2025. Parties will watch for three key developments: First, SECEX’s public interest review (per Art. 4 of the resolution) may lead to adjustments if industry relief is justified. Second, actual import statistics will reveal whether U.S./China polyol shipments indeed collapse and if other countries fill the void. Third, downstream inflation gauges will be monitored. Notably, IBGE will report any uptick in furniture and automotive prices in late 2025.
Brazil will also announce a review schedule. Under Decree 8058/2013, AD duties are reviewed typically at 2-year intervals and sunset after 5 years unless extended. The first substantive milestone will likely be early 2027, when companies can request an interim review or expiry review. Affected stakeholders (importers and foreign governments) could mount challenges at that point if they can argue that circumstances have changed or that harm is limited. Meanwhile, Domestic foam producers may explore alternative feedstocks or adjust formulations to manage polyol shortfalls and cost increases.
In summary, the new anti-dumping duties mark a protectionist shift for Brazil’s PU supply chain. They will bolster the lone domestic polyol maker in the near term, but at a price: higher costs and potential supply tightness for foam users. The measure rebalances trade flows (likely reducing U.S./China exports, redirecting to other sources) and is emblematic of Brazil’s recent tougher stance on chemical imports. Monitoring will focus on trade statistics, commodity prices, and any legal countermeasures.
July 28, 2025
Adnoc Update
Adnoc contests EU findings as €12b Covestro deal faces deeper scrutiny
EU investigates foreign subsidies of Adnoc’s Covestro deal; decision due by December 2
Last updated: July 28, 2025 | 14:45
Justin Varghese, Your Money Editor
2 MIN READ
European Union flags flap in the wind outside EU headquarters in Brussels, Friday, February 21, 2020AP
Dubai: The European Commission launched an in-depth investigation into Abu Dhabi National Oil Company’s (Adnoc) proposed €12 billion (Dh47.8 billion) acquisition of German chemicals firm Covestro.
The probe is part of a newly enforced EU regulation aimed at addressing the competitive impact of foreign state subsidies.
In its official statement, the European Commission said it had “preliminary concerns that foreign subsidies granted by the United Arab Emirates (UAE) could distort the EU internal market.”
Among the subsidies under scrutiny are an “unlimited guarantee” from the UAE government and a potential capital injection from Adnoc into Covestro—both of which may have given Adnoc an edge over any competing bidders.
The Commission argues these benefits might have allowed Adnoc to offer a purchase price and terms that wouldn’t typically be viable for unsubsidised investors, raising fears of unfair competition within the bloc.
ADNOC contests EU findings
In a statement, ADNOC said it “respects the European Commission’s process” but disagrees with the regulator’s initial concerns over its proposed acquisition. The company added it is confident the deal will ultimately be cleared.
“ADNOC has a proven track record in value creation and driving opportunities for growth built on long-term and mutually beneficial partnerships,” the statement said.
”While we respect the European Commission’s process, we contest the preliminary findings of the Commission and are confident that when the facts are fully examined, there will be no reason to hold up clearance of a transaction that will add great value for all stakeholders and stimulate European industry.”
Gulf investments in Europe
While the deal had earlier passed the EU’s traditional merger control process, the new investigation under the Foreign Subsidies Regulation (FSR) reflects rising European caution toward major acquisitions by state-backed companies from the Gulf and beyond.
If the Commission concludes that the deal breaches the regulation, it could force Adnoc to offer significant concessions—or even block the acquisition entirely. A final decision is expected by December 2, 2025.
This isn’t the first time EU regulators have taken issue with UAE state-linked funding. In 2023, Emirates Telecommunications (e&) had to alter terms of its €2.2 billion deal for PPF Telecom assets by dropping an unlimited state guarantee to receive EU approval.
Why this matters now
The EU’s Foreign Subsidies Regulation came into force just over a year ago and has since been used mainly to investigate Chinese investments in rail and clean energy sectors.
For UAE-based firms eyeing strategic assets in Europe, the Covestro case could serve as a landmark moment, shaping how future cross-border deals are structured and scrutinised.
Adnoc, as the UAE’s largest oil producer, has been seeking to diversify globally through downstream and specialty chemicals investments, with the Covestro deal seen as a strategic entry into high-performance polymers used in everything from smartphones to electric vehicles.
If approved, the acquisition would hand Adnoc control of Covestro’s operations across Europe and beyond, with over 18,000 employees worldwide and major customers in auto, electronics, and construction sectors.
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