Between 2018 and 2020, the Trump administration introduced a wave of tariffs aimed at recalibrating global trade dynamics, particularly with China. These measures were expected to boost domestic industries by making imports more expensive and encouraging local production. While sectors like steel and manufacturing were directly targeted, the ripple effects were far-reaching, especially in the packaging industry.
“The impact of Trump-era tariffs on packaging continues to shape the U.S. industry, driving up costs, disrupting supply chains, and forcing businesses to rethink their sourcing strategies.”
In 2025, former President Trump, during his new term, reintroduced and expanded tariffs, including a 10% baseline on all imports and up to 34% on Chinese goods, with additional duties on imports from Canada and Mexico.
The Ongoing Impact of Tariffs on the Packaging Industry
These new tariffs have reignited price hikes and uncertainty across the packaging supply chain, causing businesses to once again reassess sourcing strategies, manage rising material costs, and prepare for prolonged market volatility.
Even years after implementation, packaging businesses, including suppliers like Unique Custom Packaging, are still grappling with inflated raw material costs, disrupted supply chains, and logistical complexities. This blog explores why the aftershocks of these tariffs continue to shape the packaging world.
A Quick Recap of Trump-Era Tariffs on Packaging Materials
Understanding the Tariffs and Their Impact on Packaging
Two primary types of tariffs affected the packaging sector:
- Section 301 Tariffs: These focused on a wide range of Chinese imports, including packaging machinery, plastic components, and other materials.
- Section 232 Tariffs: These targeted steel and aluminum imports are essential for industrial packaging and protective materials.
The purpose was to protect U.S. industries and penalize unfair trade practices. However, the packaging sector, which relies heavily on a complex global supply chain, became an unintended casualty.
Goals Behind the Trade Policy
The administration’s broader strategy included:
- Promoting domestic manufacturing
- Pressuring China to adjust trade practices
- Reducing the U.S. trade deficit
Although some sectors experienced a short-term boost, the packaging industry encountered long-term volatility, which continues to affect operations and profitability.
Immediate Impact on the Packaging Industry
The Surge in Raw Material Costs Due to Tariffs
Steel, aluminum, and plastic resin are foundational to many packaging products. The tariffs caused a surge in prices for these raw materials almost overnight. For instance, aluminum foil used in food packaging became significantly more expensive, while plastic resin prices saw steep increases due to disrupted imports.
Unique Custom Packaging had to revise its pricing on several popular products, such as custom packaging boxes, custom shipping boxes, and retail display packaging due to rising input costs.
How Tariffs Contributed to Supply Chain Disruption
Companies scrambled to find alternative suppliers, shifting sourcing to countries like India, Vietnam, and Mexico. This wasn’t a seamless transition. Contracts had to be renegotiated, logistics needed restructuring, and quality control became a larger concern.
The sudden and sustained change in sourcing dynamics disrupted just-in-time inventory systems, increased lead times, and elevated shipping costs, especially during the height of global demand and pandemic-induced bottlenecks.
Lingering Effects of Tariffs in Today’s Packaging Market
Pricing Instability
One of the most significant legacies of the Trump-era tariffs is continued pricing volatility. Despite global markets stabilizing post-pandemic, many materials have not returned to pre-tariff price points. Long-term contracts, signed during the price spike, have locked businesses into higher rates.
Suppliers, having adjusted to higher cost structures, remain hesitant to lower prices even when market conditions improve. This persistent elevation in costs affects everything from small batch packaging runs to large-scale industrial solutions.
Increased Logistical Complexity
With sourcing diversified across multiple countries, companies now manage more fragmented and intricate logistics networks. This has led to higher coordination costs, greater dependency on international freight services, and increased risk exposure due to geopolitical tensions.
Visualizing the Ongoing Price Trends in Packaging
A comparison of material price trends from 2017 to 2024 clearly illustrates the problem:
- Steel prices spiked following the implementation of Section 232 tariffs and have only slowly receded.
- Aluminum followed a similar trajectory, with prices peaking around 2020.
- Plastic resin costs rose sharply due to import disruption and have remained volatile.
This sustained high pricing continues to burden manufacturers and packaging companies alike.
Strain on Small and Mid-Sized Packaging Businesses
The Impact of Tariffs on Shrinking Margins in Packaging
While large packaging corporations might absorb or pass along cost increases, smaller firms lack the bargaining power to negotiate better deals or pivot quickly. As a result, many have had to reduce profit margins, cut back on investments, or, in some cases, exit the market.
Reduced Global Competitiveness Due to Tariffs in Packaging
Tariffs made U.S.-based packaging firms less competitive globally. Foreign companies not affected by the tariffs were able to offer lower prices, putting U.S. exporters at a disadvantage. This weakened international sales and forced a more domestic focus, which limited growth opportunities for many firms.
Packaging Innovation and Adaptation Post-Tariffs
Shift Toward Domestic Suppliers
To mitigate tariff-related risks, many companies increased investment in domestic manufacturing. While this reduced dependency on foreign suppliers, it also introduced new challenges, such as limited capacity, higher labor costs, and longer lead times in some regions.
Nonetheless, this move helped some businesses regain control over supply chains, and in certain cases, reduced total logistics costs despite higher material prices.
Eco-Friendly Alternatives on the Rise
Interestingly, the need to adapt led to a surge in eco-conscious innovation. Materials such as paperboard, biodegradable polymers, and recycled fibers have gained popularity. Not only do these alternatives avoid tariff-related materials, but they also align with growing consumer demand for sustainability.
Unique Custom Packaging has seen a rise in demand for eco-friendly custom packaging solutions, including recyclable shipping boxes, custom printed paper bags, and biodegradable mailers. These sustainable packaging options help brands appeal to environmentally conscious consumers and comply with green regulations.
Current Trade Policies and What’s Next for the Packaging Industry
As of April 2025, the U.S. has implemented several significant trade policy changes that directly affect the packaging industry:
- Reciprocal Tariffs: Effective April 5, 2025, a 10% tariff was applied to all U.S. imports. Starting April 9, higher individualized tariffs were introduced for countries with which the U.S. has the largest trade deficits.
- Section 232 Tariffs: A 25% duty on all steel and aluminum imports was announced on February 10, 2025, and implemented on March 12, 2025.
- De Minimis Exemption Removal: Beginning May 2, 2025, the U.S. will eliminate the de minimis exemption for packages from China and Hong Kong valued under $800, imposing tariffs of 120% or a per-package fee starting at $100, increasing to $200 by June 1, 2025.
- Sector-Specific Investigations: The administration has initiated investigations into the national security implications of importing computer chips, semiconductor manufacturing equipment, and pharmaceutical products, potentially leading to new tariffs on these items.
These policies are part of the broader “America First Trade Policy,” which aims to rebalance trade and promote domestic manufacturing.
Adapting to Market Volatility with Innovative Packaging Solutions
The packaging industry should prepare for continued volatility in material costs and supply chain disruptions. Strategic adjustments, such as diversifying sourcing strategies and investing in domestic production capabilities, will be essential to navigate the evolving trade landscape.
Businesses like Unique Custom Packaging are already innovating with custom packaging boxes, custom mailer boxes, and retail-ready display packaging boxes that serve both cost-efficiency and environmental goals. Whether it’s branded e-commerce packaging or durable corrugated shipping cartons, offering versatility and scalability is key to maintaining a competitive edge.
Final Thoughts
The Trump-era tariffs may have been aimed at realigning global trade, but their ripple effects are still deeply embedded in the packaging world. From inflated raw material prices and fractured supply chains to the operational strains on small businesses, the consequences are far from temporary.
Even as newer policies and market forces emerge, the lessons of the past several years have changed how the packaging industry operates. Agility, diversification, and innovation have become essential survival tools. For those in the sector, the path forward demands a strategic balance between cost-efficiency, risk mitigation, and responsiveness to global shifts.
Understanding these long-term impacts isn’t just vital for packaging firms but for every industry that relies on packaging to deliver, protect, and present their products in a volatile economic landscape.
Frequently Asked Questions
Q1: Why are packaging prices still high even though the tariffs were introduced years ago?
A: The tariffs caused lasting disruptions in supply chains and raw material pricing. Many suppliers are locked into higher contracts, and market volatility has kept prices from stabilizing.
Q2: Have any of the Trump-era tariffs been reversed?
A: While the Biden administration has reviewed some policies, most of the key tariffs impacting packaging materials remain in place.
Q3: How are packaging companies adapting to these tariff-related challenges?
A: Companies are diversifying suppliers, reshoring production, investing in automation, and exploring sustainable packaging alternatives to reduce reliance on tariff-affected materials.
Q4: Are eco-friendly packaging options less affected by tariffs?
A: In many cases, yes. Materials like recycled paperboard and biodegradable polymers often come from domestic or non-tariffed sources, making them a strategic alternative.
Q5: What should businesses consider when sourcing packaging in this climate?
A: Flexibility is key—work with suppliers offering multiple sourcing options, and prioritize transparency in pricing and lead times.
