Ongoing shifts in U.S. trade and industrial policy are reshaping the business landscape for coatings manufacturers and suppliers, with new developments affecting tariffs, electric vehicle incentives, and the global supply chain.

Following the previously covered announcement of a 90-day U.S.–China trade truce, tension between the two countries has resumed. President Trump recently accused Beijing of violating the Geneva agreement by delaying the issuance of export licenses for rare earths and critical minerals. Treasury Secretary Scott Bessent expressed concerns over China's actions, suggesting that the delays might be intentional, and indicated that the U.S. is considering reinstating previously suspended tariffs and imposing additional export controls in response.

This week’s news underscores the escalating tensions between the U.S. and China, particularly concerning the supply of rare earth elements crucial for various industries, including the coatings sector. The potential reinstatement of tariffs and export controls could significantly impact the global supply chain and pricing of essential materials.

These developments follow a flurry of tariff-related executive orders in April. In parallel, the U.S. had implemented a universal 10% tariff on all imported goods, citing national economic security. This move, effective since April 5 and part of PCI’s ongoing coverage, could continue to affect raw materials and specialty chemical imports used in coatings formulation.

Further straining cross-border logistics, the U.S. recently reduced the de minimis threshold for duty-free imports from China, dropping it from $800 to $100 per package. This change is expected to disrupt e-commerce supply chains and increase costs for small-batch and specialty product imports.

Meanwhile, policy shifts tied to the electric vehicle market are drawing concern across sectors tied to transportation coatings. A Republican-sponsored bill, referred to by President Trump as the “Big Beautiful Bill,” would eliminate the $7,500 federal tax credit for new EVs after 2026 and end the $4,000 used EV credit by late 2025. If passed, the legislation could reshape demand projections in the automotive sector, with potential trickle-down effects for OEM coatings suppliers.

In addition, a Congressional resolution passed this week would block California’s authority to enforce stricter EV and emissions mandates under its Clean Air Act waiver. Once signed, the measure will effectively nullify California’s 2035 EV mandate.

The convergence of tariff fluctuations and transportation policy changes presents an uncertain outlook for coatings industry stakeholders. Many manufacturers are now re-evaluating sourcing strategies, price forecasts, and segment-specific demand plans as regulatory momentum shifts.