Tariffs, Trade Wars, and Your Packaging: What Now

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Tariffs are taxes imposed by a government on imported goods. When a product crosses a border into a new country, that government may levy a tariff—effectively increasing the total cost of that good before it reaches a business or consumer.

Tariffs have been used for centuries as tools of economic policy and national strategy. Why? Some policymakers believe it can achieve goals such as:

1. Revenue Generation
   Tariffs can serve as a direct source of government income—particularly for countries that don’t rely as heavily on income or corporate taxes. By taxing imported goods, governments generate revenue while promoting homegrown alternatives.
2. Protection of Domestic Industries
   Tariffs make imported goods more expensive than domestic alternatives. The presumed goal here would be to protect domestic industries / businesses, and allow these industries to sustain and grow, even in the face of lower cost overseas competition.
3. Trade Policy and Leverage
   Tariffs are often used as a bargaining chip in global trade negotiations. A country might impose them in response to what it sees as unfair practices abroad—such as subsidies, forced technology transfers, or imbalanced market access. This tit-for-tat approach, often referred to as reciprocal or retaliatory tariffs, is at the heart of many recent trade escalations.
    

   It’s worth noting that tariffs tend to be fluid and politically driven. The tariff landscape of today may shift dramatically next quarter or even next month—making long-term planning more challenging, but also more essential.

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When goods are imported into the United States, the foreign manufacturer or exporter does not pay tariffs directly. Instead, they are paid by the importer of record—the U.S.-based entity (often the brand, distributor, or customs broker) receiving the goods.

1. Goods Arrive at a U.S. Port: When a shipment crosses the U.S. border, it must be declared to U.S. Customs and Border Protection (CBP).
2. Tariffs Are Calculated: CBP applies the appropriate tariff rate based on the product’s classification and the country of origin.
3. Importer Pays the Tariff: The importer must pay the tariff before the goods are released from customs. This is usually done through a customs broker who facilitates the transaction.
4. Tariff Costs Are Often Passed Along: While importers pay the tariff upfront, they often pass this cost downstream—either directly to customers or as part of increased product pricing.

If you're importing raw materials, packaging or finished goods for business use (e.g., custom-printed mailers), your small carrier shipments will likely be treated as commercial imports, making tariffs and customs documentation likely.

Who Pays? The recipient (importer) in the U.S.—whether a business or individual—is responsible for paying any applicable tariffs, duties, or taxes.

How Are They Collected? FedEx, UPS, and DHL (Private Couriers) act as customs brokers. They pay duties and tariffs on your behalf at customs and then invoice the recipient (you or your business). Delivery is typically held until payment is made, or charges are billed post-delivery, depending on your account terms.

USPS (and foreign posts via USPS) do not act as a customs broker in the same way. Instead, the U.S. Customs and Border Protection (CBP) assesses the duties. USPS may deliver the item with a bill for duties due (usually via a paper notice or upon delivery), or packages may be held at a local post office until the duty is paid.

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Before 2025, packaging manufactured overseas and imported into the United States was subject to tariffs, duties, and surcharges that generally totaled 3-7%, depending on the type of packaging, the country of origin, and the trade agreements in place with the country. These tariffs are referred to as Chapter 1-97 HTSUS tariffs. For example, polymailers (which are classified by the harmonized tariff code of 3923.21.00.95) manufactured in Malaysia in 2024 would have been hit with an approximately 6% fee when being imported into the US, a fee that would have been inclusive of tariffs (around 3%) plus additional duties and surcharges.

President Trump has been enacting a series of global and reciprocal tariffs under the International Economic Emergency Powers Act (IEEPA). On April 2, 2025, under the IEEPA, President Trump announced a 10% global tariff and a series of country-specific reciprocal tariffs, with a stated goal of leveling the playing field in global trade relations and reclaiming control over American economic policy.

These adjustments represent a significant escalation in trade protectionism, with the average effective U.S. tariff rate rising from approximately 2% in early 2025 to an estimated 24% — the highest level in over a century.

​After extreme market volatility and domestic and international negative feedback in response to these tariffs, Trump announced a 90-day pause on most reciprocal tariffs on April 9, 2025, with the reported goal of giving companies more time to adjust their supply chains. He did not pause the 10% global tariff.

China is excluded from the 90-day pause. Instead, Trump escalated trade tensions with China by immediately raising tariffs on Chinese exports to 125%, triggering China's retaliatory move to hike U.S. goods tariffs from 34% to 84%. Canada and Mexico are also excluded from the pause. USMCA-compliant goods will continue to be traded tariff-free, and other goods will continue to be subject to a 25% tariff—more on this in the next section.

Note that smartphones and computers, semiconductors, pharmaceuticals, oil and gas, minerals, and educational materials are exempt from the 10% global tariff. Additionally, there are a variety of sectoral and special tariffs in place outside of Chapter 1-97 HTSUS and IEEPA global and reciprocal tariffs. While these don’t affect packaging, it is essential to note that they do impact many other commodities and will remain in effect during the pause. This means that steel, aluminum, automobiles, and more are subject to an additional 25% sectoral tariff during the pause.

To clarify how tariffs will be levied on packaging during the 90-day pause:

• Packaging imported from most countries is subject to a 10% global tariff, plus existing Chapter 1-97 HTSUS tariffs that were already in place, plus any additional duties and surcharges. These extra tariffs, fees, and surcharges typically amount to 3-7%. While reciprocal tariff rates are in place, they are considered suspended and won’t be levied for 90 days after April 9th, 2025.

• Packaging manufactured in Canada and Mexico and imported into the US is considered USCMA-compliant and is exempt from the 10% global tariff. While USMCA-compliant goods are imported tariff-free, they are subject to additional fees and surcharges that were already in place before 2025. Non-USMCA-compliant goods imported from Mexico and Canada are subject to 25% IEEPA tariffs.

• Packaging imported from China is subject to 145% IEEPA tariffs, plus existing Chapter 1-97 HTSUS tariffs and additional fees and surcharges already in place before 2025.

Presumably, reciprocal tariffs will begin to be levied after the 90-day pause is over, in addition to global tariffs (10%), Chapter 1-97 HTSUS tariffs, and any sectoral and section-specific tariffs.

The following table outlines the initially threatened IEEPA Global and Reciprocal tariffs, and the current rate during the 90-day pause (which, for most countries, is simply the 10% global tariff).

Note that this table does NOT show Chapter 1-97 tariffs that were in place before 2025 or any sectoral or section-specific tariffs (such as those for steel, aluminum, and auto parts).