U.S. Tariffs and Their Far-Reaching Effects on the Paints & Coatings Sector

Over the past year, the U.S. government has aggressively implemented tariff measures affecting nearly every country, significantly reshaping global trade dynamics. Under the new Trump administration, the initial focus of these tariffs was on America’s three largest trading partners—Canada, Mexico, and China—triggering a wave of import levies and retaliatory actions. Following this stance, the administration introduced the so-called "Liberation Day" tariffs, extending trade restrictions to nearly every country worldwide. These measures collectively aimed to protect domestic industries, increase government revenues, and address long-standing trade imbalances.

The ripple effects of U.S. tariffs are substantial, impacting multiple industries, including the paints and coatings sector. The imposition of these tariffs has led to far-reaching consequences such as higher raw material costs, supply chain disruptions, and increasing pressure on domestic manufacturers. Many critical inputs—including resins, pigments, additives, and metal-based materials—are sourced internationally, and tariff-driven cost increases have cascaded across downstream industries such as automotive and construction.

Canada and Mexico hold a dominant position in the U.S. coatings trade, accounting for the largest export and import flows, while China remains a smaller but strategically important partner. With a trade surplus of approximately $1.7 billion ,the U.S. coatings industry continues to benefit materially from cross-border trade, underscoring the importance of integrated global supply chains.

Automotive Coatings

U.S. tariffs have introduced significant uncertainty and disruption across global automotive supply chains, with clear implications for OEM coatings demand.

In Mexico, tariffs have disrupted automotive production, forcing manufacturers to adjust supply chains and production schedules. This has negatively affected the development of the OEM coatings market, particularly for heavy vehicles, where production declined amid falling exports and uncertainty over raw material availability following the introduction of 50% steel tariffs.

China’s industrial activity, including automotive manufacturing, contracted at its fastest pace in over a year due to rising tariff pressures and economic headwinds. Weaker export demand and heightened uncertainty have led manufacturers to adopt a more cautious approach to production planning, dampening coatings demand.

Further in South Africa, the proposed 25% tariff on vehicle exports to the United States is expected to significantly affect manufacturers such as BMW, Ford, Isuzu, Mercedes-Benz, Nissan, Toyota, and Volkswagen. These companies operate production facilities geared toward global markets, including the U.S., making them particularly vulnerable to tariff-related demand shifts.

 

Coil and Extrusion Coatings

The coil and extrusion coatings segment, closely tied to steel and aluminium production, has been particularly exposed to U.S. tariff measures.

Forecasts predict a decline in the market in Mexico in 2025 due to weak construction activity, falling aluminium output, and the elevated U.S. tariffs. With steel and aluminium tariffs doubled to 50% in June 2025, Mexican metal exports have become less competitive in the U.S. market, resulting in reduced orders and lower production across downstream coatings segments.

Experts predict a contraction in the coil and extrusion coatings market in Canada by 2025. This decline is driven by reduced steel production, higher input costs, ongoing trade tensions with the U.S., and weak performance in key end-use sectors such as construction and automotive. The increase in the U.S. tariffs—particularly the doubling of steel tariffs from 25% to 50%—has heightened market uncertainty, reduced export demand, and discouraged investment in coil-coated materials.

Industrial Coatings

U.S. tariffs have negatively affected the industrial coatings market by increasing the cost of imported resins, additives, and chemical intermediates. At the same time, higher steel and aluminium prices have reduced demand from key end-use sectors such as heavy machinery, energy, and infrastructure. These dynamics have disrupted supply chains, limited manufacturers’ ability to pass on costs, and placed sustained pressure on profit margins—particularly for smaller and mid-sized producers.

Architectural Coatings

U.S. tariffs have not directly affected decorative or architectural coatings. tariffs, given their lower dependence on metal substrates. However, rising raw material costs—including resins and pigments—continue to influence pricing strategies and margins, particularly in highly competitive markets.

Conclusion

U.S. tariff policies are exerting a significant influence on the global paints and coatings industry by increasing costs, disrupting supply chains, and forcing strategic shifts in sourcing and production. While larger manufacturers with diversified global footprints are better positioned to absorb these pressures, smaller players and downstream industries face more acute challenges. Overall, the impact on pricing, competitiveness, and trade flows highlights the complex interplay between trade policy and industrial operations within an increasingly interconnected global coatings ecosystem.

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