Europe’s biggest paintmaker Akzo Nobel NV has warned that European and US tariffs on Chinese chemicals imports could drive up prices for Western consumers.

The European Union’s imposition of anti-dumping duties on titanium dioxide imports from China, and the possibility of US measures on its epoxy, will mean higher prices for Akzo Nobel, Chief Executive Gregoire Poux-Guillaume told Bloomberg in a phone interview on Tuesday. 

“If our source of supply is more expensive, then we have two possibilities and you have to pursue both,” Poux-Guillaume said. “One is a new source of supply and two, you reflect that cost increase into your pricing. There’s a way to mitigate, but there’s no free lunch.”

The European Commission announced tariffs on imports of titanium dioxide from China on July 10. The measure imposes anti-dumping duties of up to 39.7%. 

The chemical is commonly used in a wide range of consumer products, including pharmaceuticals, cosmetics and toothpaste. It’s also an ingredient in sunscreens as a protection method from harmful ultraviolet rays. 

Earlier this year, the US International Trade Commission said “there is a reasonable indication” that the domestic industry is materially injured or threatened by imports of epoxy resins from China, India, South Korea, Taiwan, and Thailand. The government body said the products are “allegedly sold in the United States at less than fair value and subsidized” by the Asian governments.

World Impact

The tariffs “will impact the world from a raw material price perspective because China is a significant supplier of some of the upstream chemicals,” Poux-Guillaume said. “And if the raw material prices in Europe go up, that is going to be felt in the consumer prices at some point,” he said.

Amsterdam-based Akzo Nobel uses titanium dioxide as an ingredient in its paints and coatings as a key pigment for producing white color. The company uses resins to make coatings. China is a crucial producer of the two chemicals.

“If there are abnormally low prices that can’t be justified, then this is the ground for tariffs,” he said. “Where it becomes dangerous is when tariffs are used as a form of economic warfare or protectionism, because that has other knock-on effects.”