Tariff Updates
Canada
As of August 1, 2025, the United States, under the authority of the International Emergency Economic Powers Act (IEEPA), has imposed a 35% tariff on most goods imported from Canada. This measure, an increase from an initial 25% tariff introduced on March 4, 2025, targets the Paper & Plastic Packaging Products & Materials industry among others. The stated rationale is to address national security issues. A critical provision of this new policy is that Canadian goods which qualify for preferential treatment under the United States-Mexico-Canada Agreement (USMCA) are exempt from these additional duties, highlighting the importance of origin certification.
Existing Trade Agreements
The trade relationship in the paper and plastic packaging sector between the U.S. and Canada is robust, governed primarily by the USMCA. In 2024, the total two-way trade for pulp and paper products exceeded $14 billion. In the plastics industry for the same year, U.S. plastics exports to Canada were approximately $7.3 billion, while Canadian plastics exports to the U.S. reached a significant $14.9 billion. This substantial trade flow underscores the deep integration of the North American supply chains in this sector.
New Tariff Changes
The new policy represents a significant shift from the previous trade environment, which operated largely under the low or zero-tariff framework of the USMCA. The primary change is the introduction of a punitive 35% tariff on goods that do not meet the USMCA rules of origin. Previously, with low most-favored-nation (MFN) rates, formal certification under USMCA was not always a priority for businesses. This new tariff creates a powerful incentive for Canadian producers to meticulously document and certify their products' compliance to avoid the steep duty, fundamentally altering the administrative and compliance landscape for exporters.