Need to Know

• CCA members are reporting uncertainty more consistently than any single, universal cost shock as companies verify classifications, rules of origin and potential relief.
• Even where principal finished paint and pigment headings are absent from tariff lists, packaging, containers, specialized raw materials and equipment components can create indirect exposure.
• Smaller companies may face greater pressure because they generally have fewer resources for trade compliance, supplier diversification and detailed tariff analysis.
• CCA is seeking clarity, exclusions and remission where appropriate, while many members are taking a “verify before acting” approach to sourcing and pricing decisions.

PCI: Now that the tariffs and counter-tariffs are in effect, what are CCA members actually reporting? Are the pressures showing up primarily in input costs, packaging, equipment and parts, customer demand, delayed investment or somewhere less obvious?

Carey: It is still very early, and many companies are continuing to assess the full impact of both the U.S. tariffs and Canada's counter-tariffs on their operations.

What we are hearing most consistently is a sense of uncertainty. Companies are spending considerable time working with customs brokers, suppliers, trade advisors and customers to determine whether products are captured, whether relief mechanisms may apply and what the implications are for sourcing, inventory and pricing decisions.

The concerns reported to CCA extend well beyond finished coatings products. Members have been examining the potential impact on packaging, containers, specialized raw materials, equipment components and other manufacturing inputs that move through highly integrated North American supply chains.

CCA has been actively engaging with Finance Canada and other federal departments, while also coordinating closely with like-minded manufacturing and trade associations across Canada. One of our priorities is ensuring that government understands how these measures operate in practice, not just on paper.

The sector is still working through a situation that continues to evolve rapidly, and many companies are being careful not to draw conclusions until customs classifications, remission provisions and other administrative questions are fully resolved.

PCI: The principal paint and pigment headings were not included in Canada's counter-tariff schedule. Where are members still seeing indirect exposure, and are certain CASE segments or smaller companies proving more vulnerable than the headline product lists might suggest?

Carey: One of the key lessons from the past several weeks is that the headline tariff lists do not necessarily tell the full story.

For many CASE manufacturers, the question is not whether a finished coating, adhesive or sealant appears on a tariff schedule. The more significant question may be whether packaging, manufacturing inputs, equipment components or customer markets are affected.

The coatings industry sits at the centre of an exceptionally integrated North American supply chain. Materials and products regularly move across the border multiple times before reaching a customer. Imports and exports are not competing concepts in our sector; they often work together as part of the same manufacturing process.

That is why CCA has consistently maintained that neither tariffs nor counter-tariffs are ideal tools for a sector as integrated as ours. Any disruption within that system has the potential to create additional costs, uncertainty or inefficiencies for manufacturers on both sides of the border.

Smaller companies may face particular challenges because they generally have fewer resources available to devote to trade compliance, supplier diversification or detailed tariff analysis. At the same time, impacts vary significantly between companies, and we are being cautious not to make broad assumptions based on limited early data.

Ultimately, customers will continue to play an important role in determining outcomes. Whether in Canada or the United States, businesses and consumers make purchasing decisions based on value, performance, availability and price. In many respects, those purchasing decisions will be as influential as any individual tariff measure. 

PCI: CCA recently asked members for quantified information about the business impact. What broad patterns can you share from that outreach, and how is CCA using the information in its requests for exclusions, remission or other government action?

Carey: The responses we received reinforced two important points.

First, impacts are highly company specific. Exposure depends on product mix, sourcing arrangements, customer base, geography and supply-chain structure. Two companies operating in the same market can have very different levels of exposure depending on how their businesses are organized.

Second, there is often a significant difference between an initial interpretation of tariff exposure and the final outcome once customs classifications, rules of origin, remission provisions and other trade mechanisms have been fully reviewed.

As an industry association, our role is not to provide customs or legal advice. Our role is to gather information, identify common themes, ensure policymakers understand how these measures are affecting manufacturers on the ground, and advocate for exemptions or remissions as appropriate. 

We are sharing information and concerns with government officials, seeking clarification where uncertainty exists and working closely with counterpart associations that represent other manufacturing sectors facing similar challenges. We are also monitoring political and policy developments on both sides of the border, as the situation can change from day-to-day.

At this stage, we are focused as much on clarity and predictability as on cost impacts. Businesses can adapt to many challenges, but uncertainty is often the most difficult variable for them to manage.

PCI: What practical changes are member companies making around sourcing, inventory, pricing or customer communication, and what should U.S. suppliers and distributors understand about how these measures are affecting their Canadian customers?

Carey: Many companies are taking a "verify before acting" approach.

Members are reviewing supply chains, consulting customs experts, examining product classifications and increasing communication with suppliers, distributors and customers. Most companies recognize that it is important to fully understand how the measures apply before making significant sourcing or pricing decisions.

One of the messages we continue to share is that the Canadian CASE sector remains deeply integrated with the broader North American market. Canadian manufacturers purchase from U.S. suppliers, U.S. manufacturers purchase from Canadian suppliers, and many companies serve customers on both sides of the border.

That integration has developed over decades because it creates value for manufacturers and customers alike.

Whether you are a coatings manufacturer in Canada, a resin supplier in the United States or a customer purchasing finished products in either country, stability and predictability generally support better business outcomes than uncertainty and disruption.

Ultimately, markets tend to respond to customer behaviour. Regardless of government policy, it is businesses and consumers who make purchasing decisions every day. Their decisions regarding price, quality, service and availability will continue to influence supply chains and investment decisions throughout North America.

Tariff exposure can extend beyond finished coatings to packaging, raw materials, equipment and customer markets, making cross-border trade developments important to coatings formulators, manufacturers and suppliers. Follow PCI’s ongoing coatings regulations coverage.