Industries across the nation have experienced a flurry of policy changes, both domestically and internationally, that are reshaping the landscape in which businesses operate. This is particularly true for those within the chemical supply chain. As new policy initiatives are proposed and implemented by the administration and Congress, companies are left to navigate how these proposals will not only impact their day-to-day but also long-term strategic planning.

At the Alliance for Chemical Distribution (ACD), we recognize how this pivotal moment presents a few new challenges for our members and downstream partners, but we also remain optimistic about the unique opportunities and regulatory relief some of these policies are already bringing. With most of the year having been defined by a persistent pace of policy developments, we thought it might be helpful to provide an overview of what we’ve been monitoring and the possible policy impacts to the paint and coatings industry, chemical distribution and the broader chemical supply chain.

Tax Changes

The majority of this year has been consumed by Republicans’ work to extend the pro-growth policies in the 2017 Tax Cuts and Jobs Act (TCJA), many of which were set to expire at the end of 2025. This was the leading domestic priority for the White House and Congress and impacts businesses of all sizes.

After the passage of the TCJA, industries experienced tremendous growth as tax rates were reduced and the tax code was simplified, leading to job growth, greater certainty and more investments across the board.

Earlier this year, Congress focused on negotiations around key tax provisions and savings options. This included tax changes for individuals and businesses, the expansion of the child tax credit, the establishment of the auto loan interest tax deduction, updates to student loan programs and changes to clean energy and social programs such as Medicaid. At some points, it was unclear whether there was enough support to advance the legislative package, later called the “One Big Beautiful Bill,” but it was eventually signed into law on July 4, 2025, and enacted significant changes across various sectors.

This megabill made permanent a few specific policies important to the competitiveness of the chemical distribution and paint and coatings industries. These include:

• The 100% bonus depreciation, which allows businesses acquired before Jan. 1, 2030, to fully expense new equipment purchases in the first year. This incentivizes further investment in infrastructure and technology in the chemical sector, giving businesses the resources to provide cutting-edge products and services and to better meet the needs of customers.
• The research and development expensing and credit gives businesses the ability to immediately expense qualified research and development. This is particularly important to the paint and coatings industry as the sector looks to innovate and provide products that are more durable, sustainable and protective.
• The corporate tax rate reduction is maintained in this bill, providing stability and predictability for larger paint and coatings companies.
• The pass-through business deduction maintains the current rate and allows eligible business owners to deduct up to 20 percent of their qualified business income, which is especially important to many of the industry’s small businesses. By making this policy permanent, small businesses will be in a better position to grow their companies, invest in their employees and be protected from future significant tax increases.

Navigating Uncertainty

Another area that’s been in the spotlight this year is the president’s trade and tariff negotiations. As an industry that relies on international trade, these disruptions are resulting in a wave of uncertainty for both the chemical distribution and paint and coatings industries, tightening the supply chain and increasing operating costs.

While ACD is supportive of efforts to protect U.S. industries from discriminatory and predatory practices by foreign producers, the use of high and ever-changing tariffs or duties is creating real-time ripple effects, adding costs and procurement challenges to the raw materials used across every U.S. sector, especially in paint, coatings, adhesives and sealants.

Businesses in the supply chain are searching for clarity on these policies. Many of the dynamics affecting key end users, like ACD’s paint and coatings partners, will translate into lower demand for basic chemicals, synthetic materials and specialty materials used across sectors.

Earlier this year, we almost immediately experienced the shifts in trade dynamics with shipping slowing down on the West Coast. This made it incredibly difficult for ACD members, many of whom are small businesses, to anticipate changes to inventory and fulfill customer requests. As we learned during the pandemic, even a slight delay in shipping could result in three to six months of recovery, and it can have reverberating impacts on trucking, rail and warehousing sectors.

As our paint and coatings partners know, many of the chemical products U.S. industries rely on today are no longer produced domestically. That’s why it’s so critical we have established trade programs in place, like the Generalized System of Preferences and Miscellaneous Tariff Bill programs, to help facilitate access to these products that will not only support businesses across the nation but also maintain our ability to compete in the global economy.

While this certainly is not business as usual, it is our hope that this uncertainty is only temporary and the administration continues to finalize trade agreements so we can ensure our industry — and the industries we support — continue to grow, create jobs and deliver the essential ingredients of daily life.

Advocacy in Action

A year ago, we authored a Distribution Dive column about the onslaught of regulatory burdens the industry — and our supply chain partners — were facing. Multiple regulations coming from the U.S. Environmental Protection Agency (EPA), Occupational Safety and Health Administration (OSHA) and the U.S. Department of the Treasury imposed duplicative requirements and placed burdens on businesses of all sizes, all without delivering on their intended purposes. However, today, businesses are in a much different position.

Amid the rapid speed of some of these policy debates and changes, it can be easy to overlook the quieter, but significant, progress happening at the agency level. As movers of essential—and sometimes hazardous—materials, the chemical distribution industry and our partners are some of the most heavily regulated sectors in the nation. Compliance with federal, state and local regulations is of the utmost importance. However, onerous changes made to federal regulations over the last few years have imposed significant costs on businesses and placed companies in a difficult position amid high inflation and labor shortages.

One notable change this year came when the EPA announced it will revisit revisions the agency previously made to the Risk Management Program (RMP). When changes were first proposed by the previous administration in 2022, ACD underscored that the program, as implemented, had an impressive record of preventing chemical accidents while improving preparedness efforts and environmental stewardship. In fact, 97 percent of facilities did not have a reportable incident over the five years leading up to the proposal.

Under the proposed expanded rule, additional administrative burdens would likely be placed on facilities already in compliance. ACD was concerned these changes would cause unnecessary delays and further restrict the flow of goods to our downstream partners. However, even more concerning, shortly before the RMP revisions were finalized last year, the EPA quietly published a public data tool that shared information on every RMP-regulated facility to anyone with internet access. Immediately upon learning of this tool, ACD sprang into action to underscore how the public disclosure of sensitive chemical information would only heighten security risks as it relates to these critical products. Thankfully, in mid-April of this year, the tool was successfully taken off the EPA’s website and the agency has indicated it will conduct an additional review of the finalized rule to examine the merit of these changes and the financial costs on businesses. We welcome the EPA’s review as the ongoing pendulum that has plagued this rule has caused uncertainty for our members and their customers. In just the last six years, this one rule has experienced four changes.

Several proposed and final revisions made to OSHA workplace regulations will also impact the paint and coatings industry. While worker safety is paramount, it’s becoming increasingly clear that many of these latest proposals do little to benefit workers and place immense burdens on employers. In fact, there is a lack of evidence supporting the need for additional regulations.

ACD has encouraged the current U.S. Department of Labor leadership to review changes made to the Hazard Communication Standard (HCS), the Worker Walkaround Designation Process, the Emergency Response Standard and the Independent Contractor Rule. Under these changes, the agency is considering a one-size-fits-all approach that will upend the way businesses safely and effectively oversee worker safety while placing them under strict timelines. HCS, for example, will require downstream users, like paint and coatings customers, to update the way their safety data sheets, labels and training are handled, resulting in millions in additional costs, which could result in greater job losses.

Regulatory certainty is critical to maintaining business performance and ensuring industries can continue to support the economy and its workforce. While there is still a lot of work to be done, we are fortunate to see a light at the end of the tunnel as it relates to administrative burdens and uncertainty.

Businesses are at a unique juncture. Given the dynamic regulatory and policy landscape today, industries have managed unpredictable challenges and identified new growth opportunities. As we continue to navigate trade uncertainties, the assurance that comes with recent pro-growth tax policies and the regulatory review and relief is welcome news. These factors are certainly necessary if we want sectors across the supply chain to continue to create jobs, invest in their businesses and contribute to our economy in a meaningful way.

Learn more about the role of regulations in shaping the future of the paint and coatings industry.