Trump Tariffs: Why Packaging Should Be Exempt
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The Trump Tariffs have created challenges for many businesses across multiple industries.
Depending on your overseas partnerships, you may experience a rise in operating costs ranging from 10% to 145%.
And these numbers can change overnight.
But certain industries are pushing back and gaining exemption status.
According to Yahoo Finance, President Trump has signed an executive order to provide U.S. automakers with a tiered tariff relief system.
Many other industries have been able to do something similar or gain exemption status altogether.
Packaging should be included in this conversation.
That’s what this article is all about.
Let’s dive in.
Packaging Drives Commerce, Not Consumption
Packaging represents a fundamental input cost, rather than the end product that consumers actually purchase.
Tariffs on packaging stack costs, impact the entire supply chain, and don’t add value to the final product itself.
Almost every product sold by an American company requires packaging:
- Food & Beverage
- Brick & Mortar Retail
- E-commerce
- Healthcare & Medical Supplies
- Consumer Electronics
- Beauty & Personal Care
- Restaurants & Food Service
Packaging tariffs also become a multiplier of inflation across the economy.
When inflation hits, consumers always bear the financial burden.
Unfair Impact on Small & Medium Businesses
Small businesses, defined as enterprises with fewer than 500 employees and revenue of less than $7.5 million, account for almost half of all private-sector employment in the U.S.
With limited financial resources, these cornerstones of the economy face severe consequences from packaging tariffs.
The National Association of Manufacturers has warned that a 25% tariff on imports from Canada and Mexico alone could add up to $144 billion to U.S. manufacturing costs annually.
Similar to consumers bearing the burden of inflation, small and mid-sized businesses will experience financial strain.
Relocating Production Is Costly
Custom packaging often involves proprietary materials, printing techniques, or structural designs that cannot be easily replicated.
The packaging for medical devices, pharmaceuticals, and food products must meet strict regulations that limit the options for substitution.
Switching suppliers and choosing the right factory involves evaluating:
- Materials
- Printing processes
- Finishing options
- Production availability
- Manufacturing capacity
- Quality control
- Production and shipping consistency
This process creates expensive transitional costs and operational disruptions.
It takes years for packaging companies to develop relationships with overseas suppliers.
But that is exactly what we’ve done for decades.
We have built a vast, vetted, and versatile supplier network.
Schedule a call today and let us help you protect your bottom line from packaging tariffs—speak to an expert.
Domestic Packaging Production Can’t Meet Demand
Even when you want to source packaging from domestic suppliers, technical constraints often make this impractical in the short term.
The specialized equipment needed to produce certain types of custom packaging may not exist within the United States.
As more brands flood the market in search of tariff-free alternatives, competition and prices increase, which creates a negative feedback loop.
U.S. packaging companies also can’t handle a sudden surge from businesses trying to avoid Trump’s packaging tariffs.
The retail industry is expected to reach $10.8 trillion by 2028.
Regardless of investments in stateside manufacturing, there’s no way a single country can absorb the packaging needs of a multi-trillion-dollar industry.
It takes the world working together.
Packaging Tariffs Hurt Domestic Jobs
When companies face sudden cost increases, they must respond by cutting other operational expenses.
Debra Boggs, founder and CEO of an executive search firm, reports that U.S. companies may react to the Trump Tariffs by slowing their hiring.
Employment reports already show sluggish growth in key sectors even before the full impact of the Trump Tariffs has materialized.
The packaging industry itself employs thousands of Americans in design, manufacturing, logistics, and sales positions.
But with the Trump Tariffs disrupting normal business operations, these workers have become vulnerable.
Packaging Materials Require Global Sources
Certain raw materials for packaging production are unavailable in sufficient quantities within U.S. borders.
Many specialized polymers, papers, inks, and adhesives come from overseas suppliers with proprietary formulas or production methods.
Switching to domestic alternatives also requires reformulation and retesting, which adds cost and disrupts operations.
Partnering with us allows you to bypass all these costly processes.
We have already built a global network that allows you to source cost-effective packaging made from high-quality materials.
Packaging Isn't a National Security Threat
The stated goals of the Trump Tariffs include addressing national security threats and reducing trade deficits.
But unlike sectors tied to national security or defense, packaging imports present negligible security concerns for the United States.
They are not linked to defense, critical infrastructure, or sensitive technologies.
The packaging sector contributes only marginally to America’s trade imbalance compared to other industries.
Exemptions from the Trump Tariffs would not undermine the broader goals of trade enforcement.
It would support the health of the broader U.S. economy.
Precedent for Strategic Exemptions
The Trump administration has demonstrated a willingness to exempt certain sectors when compelling economic arguments exist.
As alluded to earlier, notable exemptions for the Trump Tariffs have been granted for industries, such as:
- Pharmaceutical
- Semiconductor
- Lumber
- Copper
- Critical minerals
- Automotive
- Energy
Specifically, electronics manufacturers won exemptions for smartphones, flat-panel displays, and components after successfully arguing for their strategic importance.
The exemptions set a precedent for packaging to follow.
Let’s look at an example to illustrate.
As recent policy decisions indicate, PET resin used in plastic bottles may qualify for exemption.
If that’s the case, then all packaging materials deserve consideration.
Exemption Provides Economic Benefits
Exempting packaging from the Trump Tariffs would deliver immediate benefits across multiple sectors of the economy.
Lower packaging costs would help control consumer inflation by reducing price pressures for the retail and e-commerce industries.
Companies could redirect funds from tariff payments toward investments in domestic operations, technology, or expansion.
The packaging industry itself could focus on innovation rather than scrambling to reconfigure supply chains.
This would strengthen America’s competitive position in packaging production.
Take a Stand with Creative Retail Packaging
Tariffs are meant to protect domestic industries.
But we can’t just transform the entire landscape for packaging overnight or overload stateside suppliers.
And we don’t believe we should leave our global partners behind.
It’s better business if we all work together.
Join us in our stance to get packaging exempt from the Trump Tariffs by sharing this article.
With that said, the conditions of the world will always change, but we’ll always be here to guide you.
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