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Tariffs and the threat of tariffs…it’s a new age of bargaining being wielded by the White House as well as other countries in response. And whether your view of this is positive or negative, as with any move in global trade, there are implications to consider for your packaging strategy. In fact, there are even a number of reasons to be bullish on the future, especially with U.S.-based manufacturing.

To put things in perspective, here is an excellent graphic from Statista that shows what has happened thus far on the tariff front:
 

flexible-packaging

This graphic from Statista does a nice job of summarizing the key actions that have happened between the U.S. and China since the latest trade war began in the summer of 2018. And while no tariffs have yet to be levied against Mexico, the threat is there. Image Courtesy: Statista

 
To help make sense of this and what it means for your flexible packaging needs, here are some quotes from Portco’s Rich Castillo, VP of Operations:

We are paying close attention to the developing global trade situation and the implications it could have for our suppliers. Part of our strategy when developing supply chain partners has been to ensure that we source domestically as much as possible, and that when we need to work with companies that import materials, it is done in such a manner that we don’t have supply coming from just one area of the world. This strategy has served us well over time as we have been able to minimize the impact of the costs associated with things such as forces of nature, labor strikes and slowdowns at our ports and now, shifts in global trade policies.

And now a quote from Portco’s VP of Sales and Marketing, Linda Malmstadt:

The cost implications are widening for companies that are importing their packaging materials.  With the full 25% tariff now in place for products out of China, the potential for 5% on all goods from Mexico, and the ending of special trade treatment with India as a developing country, there could be significant direct and indirect cost impact on overall packaging costs.

And now, with a deal just struck with Mexico (warding off a trade war on the home front), the current administration is pushing back even more on China. More tariffs could be levied. We know this is more than just a threat having seen the current action on tariffs come to pass. So, the time for planning and action is now. Don’t get caught in a bad tariff position.
 

Some Good Tariff Articles for Further Reading

Here are some additional resources to consider when looking into the current trade war and how it might impact your company.

Trump levels new tariff threat against China, defends Mexico showdown
US Stocks Climb After US Suspends Tariffs on Mexican Goods
Tariff Battle With Mexico Ends, But What About Trade War With China?
One Tariff Crisis Is Averted. What’s Next?
 

AUTHOR: Dan Meyers