US-Canada Trade War Tests Packaging Industry
New US and Canadian tariffs up to 50% on materials like pulp, paper, and aluminum are set to disrupt deeply integrated North American packaging supply
A new trade war between the United States and Canada is set to impose tariffs up to 50% on key packaging materials, testing industry resilience. Canada announced the countermeasures on Tuesday, mirroring U.S. President Donald Trump's tariffs imposed over the weekend after trade talks collapsed.
Packaging companies are bracing for widespread effects as added costs ripple through supply chains. Sectors relying on materials directly named in the tariff orders will feel the most pronounced impact. Canada listed pulp, paper, aluminum, and steel. The U.S. cited wood products and paper, which analysts say includes containerboard and boxboard.
Ahead of the dispute, packaging executives discussed mitigation plans. Cascades executives said on August 6 they were assessing potential impacts from the U.S. tariffs and devising a plan. On August 4, Ball executives expressed concern about tariffs and said they were watching aluminum prices.
Given expectations for sweeping cost increases, some companies are assessing whether to pull forward purchases to beat the September 8 tariff deadline. Multiple sources with knowledge of the industry confirmed this. However, there is little firm evidence of widespread frontloading so far.
Fiber Sector Warns of Disruption
Trade groups for the fiber-based packaging sector have voiced strong concerns. "The U.S. pulp, paper, packaging and tissue supply chain is deeply integrated across North America," said American Forest & Paper Association President and CEO Heidi Brock. She stated that new counter-tariffs risk adding uncertainty and cost for manufacturers on both sides of the border.
On the Canadian side, the Canadian Corrugated and Containerboard Association expressed disappointment that a stable trade agreement was not reached. Executive Director Serge Desgagnés said tariffs would harm manufacturers, workers, and customers on both sides. He noted that since virtually every product relies on corrugated packaging, disrupting this supply chain would disrupt many others.
The CCCA also warned that disruptions could affect recovered fiber markets that sustain recycling infrastructure. The group called for corrugated products to be removed from the proposed tariffs.
Metals and Aluminum Supply at Risk
Beginning September 8, Canada is set to double levies for metal imports from the current 25% to 50%, mirroring the U.S. Section 232 tariffs. This directly targets aluminum, steel, and copper.
The Can Manufacturers Institute has previously noted that such tariffs filter through supply chains to raise the price of canned goods. The U.S. imports a huge amount of its aluminum and tin mill steel, with domestic can makers importing nearly 80% of the latter. Canada supplies about two-thirds of the primary aluminum used in the U.S., according to The Aluminum Association.
Trump referenced this supply disparity, saying the U.S. "desperately needs aluminum" and gets it mostly from Canada, Bloomberg reported. The Aluminum Association's Charles Johnson agreed, stating America must grow both primary and recycled aluminum production. He noted aluminum demand remains strong but it will take years to bring more domestic production online.
After Canada's announcement, the AA said it is assessing the measures and reiterated Canada is a significant trading partner. Johnson said the tariffs will negatively impact segments of the industry by limiting opportunities for U.S. producers to compete in Canada.
Glass Packaging Caught in Crossfire
Canada's tariff directive did not specifically name glass. However, glass packaging has been caught in a Canadian boycott of U.S.-produced alcoholic beverages for about a year. In July, the U.S. announced additional 50% duties on many alcoholic beverages imported from Canada.
The Glass Packaging Institute cited data showing the U.S. imported 348 million glass bottles and jars from Canada in 2025, valued over $86 million. Those items have moved freely under the United States-Mexico-Canada Agreement. The group expressed concern that additional tariffs would increase pressure on an already highly integrated supply chain.
The GPI said it is part of the Toasts Not Tariffs Coalition, which calls for a swift resolution to the trade dispute and the return of U.S. wine and spirits to Canadian store shelves.
