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Certainly you’ve seen the headlines over the last many months, and here again, just last week. A trade war is in full swing and its tit-for-tat across the globe between the U.S. and China. Of course, as a manufacturer of food products and a consumer of flexible packaging, just exactly how these tariffs will affect your business is likely top-of-mind. First, a recall of what’s happened so far (and this is very brief, so some additional links for further reading are provided below):

The first round of tariffs went into effect as of August 1, 2018…a 25% tariff on $34B of imports. If you’re importing flexible packaging, you may or may not have already seen a price increase.

At midnight, just this last Thursday (August 23, 2018), another $16B of tariffs were levied against China. Here is a quote from a CNN article covering the move and China’s response:

The United States imposed 25% tariffs on another $16 billion of Chinese goods just after midnight ET Thursday — midday in Beijing. The tax affects 279 Chinese products, including chemical products, motorcycles, speedometers and antennas.
China responded immediately with 25% tariffs on an equal amount of American goods, such as chemical products and diesel fuel. – CNN.com

Looking further out, the government has announced plans to implement an additional $200B in duties on Chinese goods with a targeted date of November 1, 2018. This means that Chinese bags and pouches will be swept up as well. China plans a $60B tariff response (to the $200B move) but is limited by the fact that China imports far less from the U.S. than the U.S. does from China.

So what does this all mean? Well, with so many moving parts and the story fluid and changing, it can be hard to predict exactly what impact this trade war will have on your business. As noted, you may have already seen a price increase in various packaging-related import goods, including roll-stock and laminations. With Chinese pouches and bags squarely targeted in upcoming tariffs, things just get tougher for those looking to save by buying offshore.

Further Trade War Reading

We will continue to watch this developing situation and will update when new, solid information comes available. For now, here are some additional links to explore the trade war and work to understand how it may or may not affect your business.

The First Round of Tariffs in July 2018
The List of Chinese Products Affected by the First Round of Tariffs ($34B), July 2018
U.S. Unveils Next Round of Tariffs
279 Affected Chinese Products in Latest Round of Tariffs
Trade War Escalates, Talks Go Nowhere
 

AUTHOR: Dan Meyers