The recent election results for U.S. president and Congress will have a measurable impact not only on domestic industry. Last week’s Adhesive and Sealant Council’s (ASC) webinar “Election 2024: Public policy implications for the U.S. adhesive and sealant industry,” hosted by ASC President Bill Allmond, was quite revealing for the European adhesive tapes business.
The U.S. adhesives market, valued at approximately $22 billion and characterised by over 700 facilities and 28,500 workers, plays a pivotal role in the global adhesives and sealants industry. For European companies operating internationally, shifts in U.S. regulatory, trade and tax policies reverberate far beyond American borders, influencing supply chains, competitive dynamics and investment strategies worldwide.
Regulatory challenges and opportunities for European adhesives companies
Recent U.S. policy shifts—such as the regulatory freeze and aggressive deregulation measures initiated under the Trump administration—present a complex picture for global market players. For European adhesives companies, these changes offer both potential opportunities and risks:
• Opportunities:
Reduced regulatory burdens in the U.S. may accelerate market entry and streamline operations for European firms with U.S. subsidiaries or partnerships. A pause in new regulatory rulemaking could allow for a more predictable environment in which to plan longterm investments and product launches.
• Challenges:
The rapid roll-back of regulations, however, including the elimination of 10 existing rules for every new one introduced, may create inconsistencies with the more stringent and stable regulatory frameworks in Europe. This divergence requires European companies to carefully align their global compliance strategies while ensuring that innovation and safety standards are maintained. Moreover, the significant reduction in Environmental Protection Agency (EPA) staffing—especially within agencies managing critical programs like the Toxic Substances Control Act (TSCA)—raises concerns over potential delays in chemical reviews and approvals. Such delays can disrupt supply chains and affect the timely introduction of new adhesive formulations, necessitating proactive planning and engagement with regulatory bodies across both continents.
Trade policy and its global implications
U.S. trade policies, notably the imposition of tariffs—25% on imports from Canada and Mexico and 10% on Chinese goods—carry substantial implications for global supply chains. For European adhesives companies, these measures influence several key areas:
• Sourcing and cost structures: Tariffs may lead to increased costs for imported raw materials and components. As European firms often rely on integrated global supply chains, shifts in U.S. trade policy can alter pricing dynamics and competitive positioning in both the U.S. and broader international markets.
• Market dynamics: Retaliatory tariffs and trade restrictions can create volatility in end markets such as automotive, construction and electronics— sectors that heavily depend on adhesives. Navigating this environment requires strategic adjustments, including exploring alternative sourcing strategies or increasing local production capabilities in key regions.
• Transatlantic collaboration: Changes in U.S. trade policy may incentivise greater co-operation between European and U.S. companies, driving initiatives such as near-shoring and joint ventures that help mitigate risks and capture emerging opportunities.
Additionally, U.S. measures like China's export controls on rare earths (e.g. lithium) underscore the interconnectedness of global markets. European adhesives firms must remain vigilant about these developments, as they can impact not only raw material availability but also the technological innovation necessary to maintain a competitive edge.
Tax reforms and their ripple effects
While U.S. tax reforms—such as the reduction of the corporate tax rate from 35% to 21%—are designed to benefit domestic manufacturers, they also affect the competitive landscape on a global scale. European adhesives companies with U.S. operations or market interests might experience indirect benefits such as increased investment in research and development and improved capital expenditure. However, these reforms can also intensify competition, compelling European firms to reassess their investment strategies and cross-border collaborations. The need for bipartisan support in the U.S. to make these tax cuts permanent further adds a layer of uncertainty, underscoring the importance of active monitoring and strategic planning by global industry players.
Environmental policy developments
The new direction in U.S. environmental policy—characterised by a potential reduction in the volume of new regulations and a shift in enforcement priorities—offers mixed implications for European adhesives companies:
• Benefits: A relaxation of stringent chemical regulations in the U.S. could reduce compliance costs and accelerate product innovation for adhesives used in various applications. This environment might also provide opportunities for transatlantic partnerships to develop and market cuttingedge adhesive technologies.
• Concerns: While the U.S. may move toward a more flexible regulatory approach, Europe’s environmental standards remain rigorous. European companies must ensure that their products meet high local compliance requirements even as they adapt to a potentially less regulated U.S. market. Additionally, the downsizing of regulatory agencies in the U.S. might lead to fragmented state-level policies, further complicating global compliance efforts.
Recent moves—such as shelving the Securities and Exchange Commission’s (SEC) climate disclosure rule and revoking mandates like the electric vehicle emissions standard—highlight a broader U.S. shift away from sustainability-focused federal policies. For European companies, which often lead in environmental innovation and sustainability, this divergence necessitates a balanced approach to maintain competitive advantage while upholding high environmental standards. Looking to the future: Advocacy and global involvement For European adhesives companies, staying engaged with policy developments on both sides of the Atlantic is crucial. Active participation in industry associations such as Afera and the Global Tape Forum (GTF) can help ensure that European voices are heard in shaping global standards. Key future strategic actions include:
• Engaging in transatlantic dialogue: Collaborate with U.S. industry associations such as ASC and PTSC and regulatory bodies to advocate for balanced, globally aligned policies that support innovation and safety.
• Adapting global compliance strategies: Develop integrated compliance frameworks that reconcile differences between U.S. and European regulations, ensuring seamless market operations across borders.
• Investing in innovation and sustainability: Leverage the opportunities presented by evolving trade and regulatory landscapes to drive technological advancements and sustainability initiatives that differentiate European products in competitive global markets.
U.S. regulatory and trade policies are pivotal forces shaping the global adhesives market. For European companies, these policy shifts present a dual-edged sword—offering new opportunities for market expansion and innovation while also imposing challenges related to regulatory divergence, supply chain volatility and competitive pressures. By staying informed, engaging in proactive advocacy and fostering transatlantic collaboration, European adhesives companies can navigate these complexities and secure a sustainable competitive edge in an increasingly interconnected global economy.
Source: Afera, The European Adhesive Tape Association
