Well, there isn't much of a build in there for us to critique. If I was to buy a Tikka for .223 AI, I'd have the factory barrel set back and rechambered and then cut and thread the barrel at 16-16.25" for suppressor use.
BBI did testing on .223 Rem, cutting the barrel from 18" down to 5". You might be 200 fps slower from 20" to a 16". A 26" .223 isn't the end of the world, but a 22" swings better when tracking moving targets.
Bullets regardless of speed kill best when you put them where they belong. However, if you're really worried about velocites (3800 fps) get a different cartridge. A .223 AI can't magically become a .22-250, Creedmoor, GT, or ARC. If you want speed then more powder is the way to go. The other option is build build a .204 Ruger, .20 Practical, or 17 Rem if speed in a small case is priority.
40 grain isn't light for coyotes, it does a wonderful job of stopping them in their tracks. It's not a great choice when calling and the dog hangs up at 400 yards or further, or for other longer range targets of opportunity varmints. The wind just comes into play. With a Tikka 1:8 twist you can use bullets that buck the wind better than a 40 grain, maybe the new ELD-VT 62 grain.
A lighter bullet is usually more fur friendly, as long as it doesn't blow up the entrance. Bullets in the 40-45 grain range rarely exit, and that's better for saving fur. If you're not worried about saving fur, then use any bullet that shoots well.
I had good results with with the 55 grain Blitz and 60 grain Varmiter from Sierra from a 1:12 twist .223 Rem back when I had time to call alot. If shot high behind the shoulder or frontal in the chest, the coyote would just lock up and fall over. I didn't have a chrono back then, but I was loading according to book around 3000-3100 fps and killed piles of varmints.
