International Challenges for the Global Economy

¶ … Global Economy and the Chemicals Industry Growth of consumer pressures and changes in political situations and governmental policies are two factors in increased globalization that can impact the chemicals industry (Daniels et al., 2014, p. 7). The chemicals industry, like other sectors, is dependent upon both "economic growth overseas" and commodity prices that can impact "economic growth in the U.S." (Muir, 2016, p. 5).

In addition, governmental policies and changes can impact the industry, as is seen in South America, where various "region's development policies that privilege industrialization as the route to economic growth" are currently being implemented, as in the Sinos Valley of Brazil (Schreiber et al., 2016, p. 58). This paper will describe how international challenges impact the chemicals industry and specifically discuss how consumer pressures and political situations/governmental policies are especially impactful on this sector.

International challenges that impact the chemicals industry are numerous: the threat of global recession is just one of several challenges that the global economy faces in the coming years. Slowdown in China, the exportation of deflation, the ambitious backstopping of markets by central banks (in Japan, China, Europe, UK and the U.S.) -- all of this creates an economic environment that is increasingly uncertain and that weighs upon the chemicals industry, which looks for new growth in developing markets (DM).

Investment in developing markets depends very much on both consumer pressure and political situations. Investor-friendly governments and geopolitical interests are major variables that impact whether sectors such as the chemicals industry will have favorable outlooks or whether they will face substantial tailwind from a global economy that is only being propped up by central banking intervention. For the chemicals industry, the policies of governments and political situations are a direct impact. For instance, recent regulations in the U.S.

regarding toxic waste emissions have compelled companies within the chemicals industry to reduce their levels of waste, boost their adherence to corporate social responsibility policies, and change the way they interact with the environment -- all of which impacts the industry's cost-savings balance (Muir, 2016, p. 44). Another example is that of government farm programs and policies, which bear a direct impact on the fertilizer market, a substantial segment of the chemicals industry (Muir, 2016, p. 57).

As Muir (2016) notes, the chemicals industry "is subject to a large number of state and federal laws and regulations involving public health, worker safety, and environmental protection" -- all of which are fiercely debated in the public forum during election cycles, as legislators, pundits, lobbyists and politicians attempt to influence the political issues and governmental regulations that impact businesses and communities. Likewise, the growth of consumer pressure adds to the demand for product, and where there is demand there is foreseeable upside.

The chemicals industry thus benefits from demand-side support in regions where government policies help to shore up agricultural.