2025 Tariff Updates: Impact on Packaging Supply Chains

• China: A 10% tariff was imposed on imports from China, effective February 4, 2025. This was later increased from 10% to 20% on March 4, 2025.
• Canada: A 25% tariff was imposed on imports from Canada. These were initially set to take effect on February 4, 2025, but were deferred to March 4, 2025.
• Mexico: A 25% tariff was imposed on imports from Mexico. These were initially set to take effect on February 4, 2025, but were deferred to March 4, 2025.

• Steel Imports: Reinstatement of the full 25% tariff on steel imports.
• Aluminum Imports: Increase of tariffs to 25% on aluminum imports, up from the previous 10%.

Key reforms accompanying these tariffs include:

• Elimination of Exemptions: Removal of all previous country-specific exemptions to prevent exploitation of loopholes.
• Strict Standards: Implementation of stringent "melted and poured" requirements for steel and "smelted and cast" standards for aluminum to ensure the integrity of imports.
• Expansion to Derivative Products: Inclusion of key derivative products to address the entire supply chain, from raw materials (e.g., rolled steel) to finished goods (aerosol cans).
• Termination of General Approved Exclusions: Aiming for a more uniform application of tariffs.
• Crackdown on Evasion Schemes: Measures to prevent tariff misclassification and duty evasion.

On April 2, 2025, President Trump announced the implementation of reciprocal tariffs on all countries. These tariffs are on top of any existing tariffs already in place.

• Baseline Tariff: A 10% tariff on all imported goods from all countries took effect on April 5, 2025.
• Reciprocal Tariffs: Higher, individualized tariffs on countries with which the U.S. has significant trade deficits took effect on April 9, 2025. However, these tariffs were later rolled back to the baseline 10% for 90 days.
  • China: Initially set at 34%, the reciprocal tariff rate escalated to 84% on April 8, then 125% on April 10.
  • European Union: Initially set at 20%, but reverted to the 10% baseline on the same day that the tariff went into effect (for a period of 90 days).
  • Vietnam: Initially set at 46%, but reverted to the 10% baseline on the same day that the tariff went into effect (for a period of 90 days).
  • Japan: Initially set at 24%, but reverted to the 10% baseline on the same day that the tariff went into effect (for a period of 90 days).
  • South Korea: Initially set at 25%, but reverted to the 10% baseline on the same day that the tariff went into effect (for a period of 90 days).
  • India: Initially set at 26%, but reverted to the 10% baseline on the same day that the tariff went into effect (for a period of 90 days).
  • Taiwan: Initially set at 32%, but reverted to the 10% baseline on the same day that the tariff went into effect (for a period of 90 days).
  • Thailand: Initially set at 26%, but reverted to the 10% baseline on the same day that the tariff went into effect (for a period of 90 days).

Notably, Canada and Mexico are temporarily exempt from these reciprocal tariffs, but are still subject to the IEEPA tariffs previously announced. Non-USMCA compliant goods will see a 25% tariff, and non-USMCA compliant energy and potash will see a 10% tariff.

Under the terms of the agreement:

• The U.S. will lower its reciprocal tariffs on Chinese imports from 145% to 30%
• China will reduce its tariffs on U.S. goods from 125% to 10%

This mutual reduction is intended to provide immediate relief to businesses and consumers affected by the trade war and to create a conducive environment for further negotiations.

• Escalating Production and Material Costs: The recent tariffs have led to industry-wide price increases, directly affecting global suppliers that serve U.S. customers. Domestic suppliers, who often rely on imported raw materials like aluminum and steel, are also affected. For instance, new tariffs are projected to add $22.4 billion to the cost of steel and aluminum imports, impacting various industries, including packaging. Consequently, brands should anticipate and strategically plan for these cost increases to maintain profitability.
• Supply Chain Uncertainty and Complexity: Frequent changes in tariff policies necessitate agile and flexible sourcing strategies. Navigating compliance now requires detailed tracking of material origins and tariff classifications. Collaborating with transparent suppliers who understand the evolving tariff landscape can help manage these complexities and ensure smoother logistics planning.
• Strained Domestic Capacity and Extended Lead Times: The substantial increase in import tariffs has led to a surge in demand for domestic packaging suppliers, straining already limited U.S. production capacities. This shift mirrors supply-chain disruptions similar to those experienced during the COVID-19 pandemic. Brands should anticipate potential supply gaps and longer wait times, highlighting the need for diversified sourcing options and strong supplier relationships to mitigate these risks.

• Food & Beverage: The imposition of a 25% tariff on imported aluminum and steel directly affects the cost of beverage cans, metal food cans, and metal closures. Given that a significant portion of the U.S.'s aluminum and steel imports originate from countries now subject to these tariffs, packaging costs for items such as canned beverages and dairy products are expected to rise.
• Beauty & Personal Care: Tariffs on imported packaging components, such as decorated glass and plastics, have led to increased costs in the beauty industry and will lead to even higher costs. While premium beauty products often have the flexibility to absorb or pass on these costs, maintaining strong relationships with reliable suppliers is crucial to ensure consistent quality and cost management.
• Industrial Chemicals: The reinstated 25% tariffs on steel and aluminum imports impact the industrial chemicals sector, particularly in the production of metal drums, chemical cans, and aerosol cans used for chemical storage and transport. These tariffs affect both raw materials and finished goods, underscoring the importance of partnering with quality-certified suppliers to maintain safety and reliability standards.
• Beer, Wine & Spirits: The beverage alcohol industry faces challenges due to tariffs affecting imported glass and aluminum packaging materials. For example, a 25% tariff on imported canned beer and empty aluminum cans increases production costs for breweries. Ensuring that suppliers can manage these constraints is vital to avoid production delays and maintain market competitiveness.

Effective packaging suppliers today:

• Provide Comprehensive Tariff Expertise: Navigating tariffs successfully requires suppliers who have detailed knowledge of customs regulations, duty classifications, and policy shifts. Suppliers with this expertise proactively anticipate challenges, minimizing unexpected costs or compliance delays.
• Maintain Diversified Global Networks: Suppliers with extensive international manufacturing networks can strategically adjust sourcing and production to regions offering the most favorable tariff conditions and available capacity. This approach reduces reliance on single-region sourcing, which can become risky during tariff escalations.
• Demonstrate Logistics Agility: Tariff-driven disruptions often extend beyond production costs into logistics and supply-chain management. Reliable suppliers possess the capability to rapidly shift logistics strategies, costly delays and maintain supply continuity.
• Ensure Transparency and Clear Communication: Transparent suppliers keep brands informed about the evolving tariff landscape, costs, and potential implications. Open communication helps brands quickly adapt their strategies and maintain confidence during periods of trade uncertainty.

• Global Sourcing Expertise: Evergreen maintains a diverse manufacturing network spanning Asia, Europe, and the Middle East, enabling strategic sourcing based on efficiency, tariff advantages, and capacity availability.
• Adaptability and Risk Management: With multiple vetted facilities and dedicated quality-assurance teams worldwide, Evergreen helps brands swiftly adapt to policy shifts without sacrificing product quality or supply consistency.
• Transparency and Tariff Guidance: Evergreen provides clear, proactive communication regarding tariff developments, ensuring brands remain informed and well-prepared to navigate this challenging time.