Update: The 15 percent tariff increase on Chinese goods is currently on hold while U.S. and Chinese officials continue discussions for a new trade agreement. However, there is no timetable for these discussions and tariffs could still come into effect without an agreement. As such, Pipeline Packaging will continue to search for alternative sourcing options and strategically purchase materials to help our customers realize the best possible price for their packaging needs.
Like many industries, the recent slate of tariff increases will have a direct impact on the packaging world. The most notable news involves the U.S. government raising the tariffs on goods from China from 10 to 25 percent, which affects the prices of materials like glass and plastic.
As expected, this additional 15 percent tariff increase means that packaging suppliers and their customers will need to pay more for manufactured packaging products. However, Pipeline Packaging is taking measures to address the situation and help mitigate the financial impact of the tariff increase for our customers.
How Pipeline Plans to Address Tariffs on Packaging Products
Lobby for Financial Relief
One way that we’re trying to mitigate the impact of the new China tariffs is by working with industry lobby groups. We are currently involved with different groups to see if United States Trade Representative can make exceptions for different packaging products so that suppliers and their customer could get some relief from the tariffs.
Identify Sources Outside of China
While China was the most cost-effective sourcing option for packaging product before the tariff increase, we are actively looking for alternative sources for packaging materials. One consideration is Mexico, although the current administration only recently dropped tariff threats against the country. Outside of North America, we’re also looking at opportunities in other Asian manufacturing locations due to lower operating costs.
Buy in Volume for Cost Savings
Unlike other packaging distributors, Pipeline has another way to help lessen the impact of tariffs: scalable stocking space. Since we’re also a stocking supplier, we can strategically purchase manufactured goods to defray some of the cost of that item.
We can work with manufacturers to see if we can attain cost savings based on volume so that we can pass those savings on to our customers and help offset the new tariffs. Tactically, we can analyze how long these items will sit in our warehouse and take on that risk to make sure that certain items are available to our customers – and at a discount. In the end, our customers not only attain a cost savings, they also benefit from flexible warehouse space, just-in-time deliveries, and our other warehousing and logistics services.
Work with Pipeline
With the new tariffs in place, we’re taking measures to minimize the impacts of these new taxes for our customers without sacrificing the quality of your retail, commercial, or industrial packaging products.
Ready to work with a packaging distributor that can offer more than just product supply? We offer everything from custom packaging assembly to inventory management so that you can streamline your internal processes while you get the products you need. Contact us today to learn how Pipeline adds value through expert packaging solutions.