Changes in tariff policies directly affect the international trade pattern of the coatings industry, especially the costs and market strategies of traders. Here are the top ten most critical impacts of tariff adjustments on coatings traders, and how to deal with these challenges.
1. Rising raw material costs
Some imported coating raw materials have risen in price due to tariff increases, such as Benzyl Chloride, which is an important chemical intermediate. Its tariff increase may lead to an increase in the cost of downstream anti-corrosion coatings. Traders need to optimize the supply chain, find alternative sources or negotiate long-term price agreements with suppliers.
2. Limited supply of high-end additives
Some high-performance additives are more difficult to import due to tariff barriers, such as DMDTA (Dimethyl Dodecyl Tetradecyl Amine). This type of surfactant can improve leveling and wetting in coatings. Traders can consider local procurement or encourage customers to adjust their formulations to reduce dependence.
3. Flame retardant market fluctuations
Triphenyl phosphate (TPP) is a common flame retardant. If tariffs are increased, it may affect the production cost of fire retardant coatings. Traders should prepare stocks in advance or explore alternatives that comply with environmental regulations, such as halogen-free flame retardants.
4. Decreased export competitiveness
Some countries have imposed tariffs on finished coatings, which has weakened the price advantage of export products. Traders need to adjust their market layout, turn to regions with lower tariffs, or increase product added value to maintain profits.
5. Increased compliance risks
Different countries have widened differences in tariffs and chemical regulatory policies. For example, some solvents or resins may be restricted by environmental regulations. Traders need to strengthen regulatory monitoring to ensure import and export compliance to avoid fines or customs clearance delays.
6. Increased inventory management pressure
Uncertainty in tariff policies may cause traders to stockpile key raw materials, such as Benzyl Chloride, to avoid future price increase risks. However, excessive inventory will increase capital occupation, and it is necessary to balance procurement rhythm with market demand.
7. Changes in customer procurement strategies
Downstream coating manufacturers may turn to local suppliers due to cost pressures. Traders need to provide more flexible cooperation models, such as technical support or customized supply solutions, to maintain customer stickiness.
8. Opportunities and challenges in emerging markets
Some countries have reduced import tariffs on raw materials to promote their local chemical industry. For example, the tax rate adjustment of DMDTA in some regions may bring new procurement opportunities. Traders can expand the supply chain in emerging markets and optimize logistics costs.
9. Rising demand for product substitution
The high costs caused by tariffs have prompted customers to look for alternatives. For example, the demand for substitutes for Triphenyl phosphate (TPP) may increase. Traders can work with technical teams to develop more cost-effective solutions.
10. Long-term supply chain reshaping
In order to reduce the impact of tariffs, the coatings industry may accelerate the regionalization of the supply chain. Traders need to adjust their global procurement networks, strengthen cooperation with local manufacturers, and improve their risk resistance.
Response strategies
- Diversified procurement: Reduce dependence on a single country or supplier.
- Policy forward-looking analysis: Pay close attention to the trends in tariffs and chemical regulations in various countries.
- Technical value-added services: Help customers optimize formulations and reduce the use of sensitive raw materials.
- Tariff changes are both challenges and opportunities. Coatings traders need to flexibly adjust their strategies to maintain their advantages in the fiercely competitive market.
