The Ripple Effect of Tariffs

Published on October 6, 2025

The Ripple Effect of Tariffs: How Hidden Costs Are Disrupting Packaging Supply Chains

When tariffs first appear, they’re easy to mistake for a simple surcharge — 10%, 25%, or 50% added to imported materials. But in reality, the effects of these policies ripple far beyond the initial price increase, reshaping every part of the flexible packaging supply chain.

1. Cost Increases Cascade Through Every Layer

A 10% tariff on a $100,000 shipment might not sound catastrophic — until it multiplies across thousands of tons of imported materials. Those costs flow down the chain, from suppliers to converters, distributors, and ultimately, the end consumer.

Margins tighten, prices rise, and competitiveness erodes. Even converters who don’t import directly feel the squeeze as domestic suppliers raise prices to match tariff-driven market levels.

2. The Administrative Burden No One Sees

Beyond the financial impact lies a new layer of administrative complexity. Importers must reclassify products under updated HTS (Harmonized Tariff Schedule) codes, track origin documentation, and prepare for audits — all while ensuring full compliance with evolving customs rules.

Mistakes can be costly. Transshipment penalties of up to 40% are now being enforced for goods rerouted through low-tariff countries. For many packaging businesses, this administrative overhead has become a hidden cost center of its own.

3. Unpredictability Becomes the New Normal

Today’s “approved supplier” can become tomorrow’s risk. A change in trade policy, the expiration of a waiver, or a new country-specific tariff can suddenly make an entire supply chain financially unviable.

The result? Constant volatility. Converters can no longer rely on a single low-cost source — they must diversify suppliers, regions, and materials just to stay operational.

👉 So, how can converters fight back?
In my next post, I’ll share how Now Plastics’ resilient supply chain model helps companies navigate volatility — offering stability, flexibility, and strategic control in a tariff-driven world.