By Ozan Ergenay and Marta Frackowiak

(Reuters) -German chemicals distributor Brenntag flagged U.S. tariff uncertainties but said it remained "fundamentally positive" for its North America business, after it posted quarterly core profit below expectations on Wednesday.

"Currently, caution prevails among our customers; no one will really expose themselves by deliberately building up stocks now, because it is actually unclear how the situation will be resolved," CEO Christian Kohlpaintner said on a conference call.

U.S. President Donald Trump's sweeping tariffs, uncertainty over his trade policies and China's retaliation had sent global markets into a tailspin and stoked fears of a global recession.

However, the United States and China agreed to temporarily slash reciprocal tariffs earlier this week, lifting investor sentiment while businesses awaited more clarity.

Kohlpaintner said 90-day tariff moratoriums, as good as they may seem at first glance, do not really help to create clarity and ultimate security, and that's why we are deliberately being a bit more cautious in our forecast assessment.

"I think the EU is behaving very sensibly here and is entering these discussions with a controlled response and, I believe, very well equipped with good arguments and now we have to wait and see what comes of it," he added.

Last week, the European Commission proposed countermeasures on up to 95 billion euros of U.S. imports if negotiations with Washington fail to remove the series of tariffs applied by Trump.

"I remain fundamentally positive about the American market, as long as these tariff discussions hopefully lead to a sensible solution," Kohlpaintner added.

"The near-term earnings outlook for Brenntag still looks relatively difficult with some uncertainty also from the announced management transition over 2025," J.P.Morgan analysts wrote in a note.

They expected the stock to underperform today, noting that Q1 consensus had come down materially over the past month and so a miss on this lowered bar would likely be taken negatively.

Brenntag shares, which have gained 5.8% since the start of the year, fell 1.8% as of 1244 GMT and were among the worst performers of Germany's blue-chip index.

Earlier in the day, the company reported operating earnings before interest, taxes and amortisation (EBITA) of 264.3 million euros ($295.75 million) for the first quarter, up from 259.7 million a year earlier.

Analysts had forecast 275.9 million euros profit, according to a poll by Vara Research.

There was a noticeable decline in North American business in March that impacted the company's performance, Kohlpaintner said.

Brenntag maintained its full-year operating EBITA outlook of 1.1 billion euros to 1.3 billion euros and currently expects 2025 earnings to be at the lower range of the guidance.

($1 = 0.8937 euros)

(Reporting by Ozan Ergenay and Marta Frackowiak in Gdansk; Editing by Eileen Soreng)