Worldwide chemical industry merger and acquisition activity rose in the second quarter, but trade tensions, especially between the U.S. and China, may limit deal activity in the months ahead. According to the management consulting firm PricewaterhouseCoopers, the second quarter saw 189 deals valued at a total of $35 billion, 76% higher than in the year-ago quarter. The largest transaction was the $10.2 billion stock deal between Wanhua Chemical and sister company Yantai Wanhua. The combined entity is expected to overtake BASF as the world’s largest maker of polyurethane materials. The second-largest deal in the quarter was International Flavors & Fragrances’ $6.4 billion tie-up with the Israeli flavor and fragrance firm Frutarom. Disruptions of the global supply chain because of trade tensions may cool off cross-border deals in the short term, PwC predicts. But local deals, such as the linking of Wanhua and Yantai, are unlikely to be affected. Another concern is rising interest rates and geopolitical tension. However, PwC remains upbeat about continued strong M&A activity in the remainder of 2018, pointing to billions of dollars in assets set for divestiture because of Bayer’s purchase of Monsanto and the pending merger of Praxair and Linde.