Trade War Cause for Concern for Pigment Suppliers

Back in June I wrote about the potential impact of a trade war between China and the U.S. on the paint and coatings industry. Now that it has become a reality, paint and coatings manufacturers and their suppliers will have to deal with the very real possibility of rising costs on a variety of products.

President Donald Trump applied tariffs of 25 percent on steel and ten percent on aluminum back in June and as this issue goes to press the escalation shows no signs of slowing. In mid-July, the U.S. imposed 25 percent tariffs on $34 billion in Chinese products, and Beijing responded by hitting the same amount of U.S. imports. Trump’s administration is preparing to impose another $200 billion in tariffs on Chinese goods, on products ranging from pickles and fish to refrigerators and air conditioners. According to reporting from Time Magazine, the Office of the U.S. Trade Representative published the list of more than 6,031 product lines and proposed ten percent tariffs on them. This move will escalate the trade war with China.

I asked a number of key players in the high performance pigments market their thoughts on a trade war with China. While there was a general sense of wait-and-see concern, it doesn’t seem to be causing outright panic at the moment. Impending environmental regulations enacted by the Chinese government seem to be cause for more concern.

Christine A. Gehres, VP Business Unit Sales & Marketing at Heucotech said,  “the speculation regarding potential import duties causes some damage by itself as it creates issues like delayed investments, before duties are even imposed.  It remains to be seen what and to what extend specific duties may impact our industry and the industries we serve.

“The influence of a trade war should be limited, however, the environmental protection program in China will have a greater impact on availability of HPP than customs or import restrictions,” said Stefan Ohren, head of PM HPP, Clariant.

Michael  Venturini, marketing director, Coatings, Sun Chemical Performance Pigments said that Sun’s global teams carefully analyzes the potential impact of trade and tightening environmental regulations to minimize disruptions to its customers. “Sun Chemical has a global manufacturing footprint that is well positioned to respond to changing market conditions and support our regional and global customers.”