How Trump’s New Tariffs on Canada Impact the Coatings Industry

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March 3rd, 2025 by Toronto Industrial Painting

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how trump tariffs impact coating industry

The Trump administration’s recent decision to impose new tariffs on Canadian imports is sending ripples through multiple industries, including the coatings sector. Announced in February 2025, the policy introduces a 25% tariff on Canadian and Mexican imports and a 10% tariff on Chinese imports, affecting everything from raw materials to finished industrial products. While these tariffs aim to bolster American manufacturing and reduce dependence on foreign goods, they come with unintended consequences—especially for industries with deeply integrated North American supply chains.

The coatings industry, which depends on key raw materials like titanium dioxide, resins, solvents, and protective pigments, is particularly vulnerable to these trade disruptions. With Canada being a major supplier and trading partner in the coatings sector, manufacturers, contractors, and inspection companies across both countries are expected to feel the impact. Increased material costs, supply chain delays, and economic uncertainty could drive up the cost of coatings production and, by extension, coatings inspection services.

For companies involved in industrial asset protection—such as Toronto Industrial Painting and its AMPP-certified coating inspectors—these changes present challenges in pricing, logistics, and market competitiveness. To stay ahead, industry leaders will need to navigate this evolving trade landscape strategically, adapting their sourcing, pricing, and operational strategies to mitigate financial strain.

Key Takeaways

Tariffs on Canadian imports will significantly impact the coatings industry, increasing raw material costs and disrupting supply chains.
The price of coatings and inspection services is expected to rise as manufacturers and contractors adjust to higher material expenses.
Canadian coatings manufacturers face reduced exports, job losses, and economic pressures.
U.S. businesses reliant on Canadian coatings may see increased operational costs, leading to shifts in sourcing strategies.
Industry adaptation will be crucial, with companies needing to explore alternative suppliers, improve efficiencies, and adjust pricing strategies.

Also see our article on: How Much Does It Cost to Do a Coating Inspection?

Impact on Raw Material Costs

The coatings industry relies heavily on Canadian-sourced raw materials, many of which will now be subject to higher import duties. These include:

Titanium dioxide (TiO₂): A critical pigment for coatings that ensures durability and brightness.
Resins and binders: Essential for coating adhesion, many of which are sourced from Canadian petrochemical facilities.
Solvents: Used in various coatings and thinning agents, imported in large volumes from Canada.

With these materials already experiencing price volatility due to global supply chain disruptions, the tariffs will only add further strain, forcing manufacturers to either absorb the costs, pass them on to customers, or find alternative sourcing options—all of which can negatively impact the industry.

Supply Chain Disruptions and Inspection Challenges

Beyond rising costs, the tariffs also introduce logistical bottlenecks for the coatings sector. Canada and the U.S. share a tightly woven supply chain, with raw materials and finished products frequently crossing borders for processing, formulation, and distribution. The new tariffs could lead to:

Delays in obtaining critical materials, affecting production schedules.
Increased compliance and customs paperwork, adding administrative costs.
Higher inspection fees, as coating inspectors will need to account for material cost surges in their pricing.

For companies specializing in coating inspections, including Toronto Industrial Painting, these disruptions may result in higher costs for businesses requiring inspections—especially in industries like oil & gas, infrastructure, and manufacturing, where protective coatings are vital for safety and compliance.

The Effect on the Canadian Coatings Industry

The Canadian coatings industry is expected to take a direct hit, as U.S. buyers may reconsider purchasing from Canadian suppliers due to the new 25% cost increase. This could lead to:

Decreased exports, forcing Canadian manufacturers to seek alternative markets.
Job losses in the coatings and manufacturing sectors.
More competitive pricing within Canada, pressuring profit margins.

Additionally, the broader Canadian manufacturing sector is already showing signs of economic slowdown due to these tariffs. The S&P Global Canada Manufacturing PMI fell to 47.8 in February 2025, indicating contraction for the first time in six months. If this trend continues, it could stifle investment and innovation within the Canadian coatings sector.

Repercussions for the U.S. Market

While the tariffs are intended to protect U.S. manufacturing, they also create new challenges:

Increased costs for businesses that rely on Canadian coatings and inspection services.
Potential shifts in sourcing, leading to reliance on alternative international markets, such as Europe or Asia, which may have longer lead times and higher shipping costs.
Tighter profit margins for coatings contractors and inspectors who struggle to absorb increased costs without losing clients.

Additionally, uncertainty over trade policies has led to a “wait-and-see” approach from many U.S. manufacturers, slowing down industrial production growth as companies pause investment decisions.

Market Adaptations and Possible Solutions

To navigate these challenges, coatings industry players may explore:

Alternative Sourcing: Finding new suppliers within the U.S. or countries not subject to tariffs.
Efficiency Improvements: Reducing waste and improving production processes to counterbalance increased costs.
Adjusting Pricing Models: Passing some costs onto consumers while remaining competitive.
Advocacy and Negotiation: Engaging with industry groups and policymakers to discuss tariff exemptions or adjustments.

Conclusion

The new tariffs on Canada present a serious challenge for the coatings industry on both sides of the border. While designed to promote domestic manufacturing, they also introduce significant cost burdens, supply chain disruptions, and economic uncertainties for coatings manufacturers, contractors, and inspectors alike.

Companies in the coatings sector will need to proactively adapt by reassessing supply chains, optimizing operations, and engaging with trade organizations to mitigate the financial impact. Those that successfully navigate these challenges will emerge stronger in a rapidly shifting global market.

Also check out our recent work certifying painters for a U.S. Army Corps of Engineers project.