The American Coatings Association (ACA) has raised concerns over the U.S. administration’s newly imposed tariffs on key trading partners Canada, Mexico, and China, warning that these measures will disrupt supply chains and escalate production costs across multiple industries. The move is expected to have ripple effects on global markets, including India’s coatings and manufacturing sectors, which rely on international supply chains.
According to ACA, the tariffs will significantly impact essential consumer products, including medical devices, pharmaceuticals, food production equipment, automobiles, and aerospace applications. With higher costs expected across industries, Indian businesses that source raw materials or finished products from the U.S. could also face price escalations and supply constraints.
Canada and Mexico are the largest trading partners of the U.S. coatings industry, with trade volumes of $1.26 billion and $815 million, respectively, while China ranks third at $117 million. The coatings sector currently maintains a positive trade surplus of $1.7 billion, underscoring its reliance on international commerce. India, which has a growing coatings and automotive sector, is deeply integrated into global supply chains and could experience indirect cost increases due to supply disruptions and higher tariffs affecting input costs.
The U.S.-Mexico-Canada Agreement (USMCA) has long provided stability in trade relations, particularly benefiting industries such as automotive manufacturing. However, with coatings playing a crucial role in vehicle production, from protective automotive paints to specialized lightweight coatings, disruptions in the North American market could affect Indian auto component suppliers and OEMs who export to or source from these regions.
Additionally, ACA emphasized that many raw materials essential for coatings production are not manufactured in the U.S. and are primarily sourced from China, limiting alternative procurement options. This could have a direct bearing on Indian manufacturers that depend on U.S.-based suppliers for specific raw materials, increasing costs and pushing them to explore alternative sources.
The association reaffirmed its willingness to collaborate with the U.S. administration to find balanced trade solutions, advocating for fair agreements that ensure stability, competitiveness, and a level playing field for businesses.
For India, the evolving trade landscape presents both challenges and opportunities. While disruptions could increase costs for Indian manufacturers, they may also open avenues for India to strengthen its role as a reliable supplier in the global coatings industry. Stakeholders across industries will be closely monitoring these developments, assessing their potential impact on production costs, supply chains, and India’s broader trade relations with the U.S. and other key global players.