Plastics and manufacturing groups in North America are sharply criticizing President Donald Trump's new tariffs on Mexico, Canada and China, warning of significant economic harm, higher costs and disruptions to finely tuned supply chains.
Trump on Feb. 1 put 25 percent tariffs on most goods from Mexico and Canada and additional 10 percent tariffs on China, as well 10 percent tariffs on Canadian energy exports. They will take effect on Feb. 4.
In reactions within hours of Trump's announcement, the Plastics Industry Association said the tariffs could have "significant economic consequences," while the Chemical Industry Association of Canada said it was "deeply concerned" they would make the highly integrated North American economies less competitive.
As well, the National Association of Manufacturers in the U.S. warned the tariffs would be especially severe for small- and medium-sized manufacturers that have less flexibility and capital to find alternatives.
And while the U.S. Chamber of Commerce said that it understands Trump's focus on the border and fentanyl, it said the tariffs won't solve those problems, headlining its news release "tariffs are not the answer."
The Washington-based Plastics Industry Association said that while it supports border security and fighting illegal drug trafficking, it called for balanced trade policies and a measured approach.
"While we understand President Trump's rationale, a blanket tariff policy could have significant economic consequences, disrupting the movement of essential machines, products, and materials that keep American manufacturers running," said Matt Seaholm, president and CEO.
"A competitive industry requires policies that protect high-quality jobs and ensure stable supply chains across sectors like health care, consumer products, and automotive. A strategic, measured approach to trade is critical to strengthening — not inadvertently harming — U.S. industry," he said.
The industry wants to work on "balanced trade policies that enhance U.S. competitiveness, reinforce supply chains, and drive continued innovation," Seaholm said.
The association said the U.S. plastics industry essentially had balanced trade in 2023, with exports of $74.2 billion and imports of $73.3 billion, although those trade balances different sharply within various sectors of the plastics industry.
Across the border, the Canadian chemical and plastics sector said it had "deep concern" about the harms from both the original U.S. tariffs and retaliatory tariffs.
In a Feb. 1 news conference, Canadian Prime Minister Trudeau listed U.S. plastics exports as one of the goods that will face retaliatory Canadian tariffs.
"The impact of these tariffs is not limited to the shop floor or the boardroom. Costs will rise and consumers and businesses alike will shoulder the weight of these tariffs at a time when cost- of-living is already high in both countries," said Greg Moffatt, president and CEO of the Chemical Industry Association of Canada.
"This approach threatens the competitive edge that North America has enjoyed in the global market, hindering our ability to innovate and deliver solutions for the long-term viability of both the American and Canadian economies," he said.
CIAC said the C$115 billion (US$78.9 billion in plastics and chemical industry trade between the two countries provides key inputs to the U.S. manufacturing economy, and it urged policymakers to negotiate a resolution.
"The effect of these newly implemented tariffs will lead to a weakened economy, harming both Canadian and American workers and families," CIAC said. "It is vital that we rekindle the spirit of cooperation that has defined our trade relationship for decades."
In Trump's first term, the U.S., Canada and Mexico renegotiated the 1992 North American Free Trade Agreement, putting in more requirements for U.S. domestically sourced components to qualify for tariff exemptions, among other changes.
Trump's tariffs would disrupt that new pact.
The National Association of Manufacturers in Washington urged Trump to protect the gains that have come from the revised NAFTA, the United States-Mexico-Canada Agreement, rather than pursue tariffs.
"A 25 percent tariff on Canada and Mexico threatens to upend the very supply chains that have made U.S. manufacturing more competitive globally," said NAM President and CEO Jay Timmons. "The ripple effects will be severe, particularly for small and medium-sized manufacturers that lack the flexibility and capital to rapidly find alternative suppliers or absorb skyrocketing energy costs."
Timmons said manufacturers support addressing the border and illegal drug flows, but said manufacturers will bear the brunt of the tariff costs and urged the government to focus on tax reform to help manufacturers.
"Ultimately, manufacturers will bear the brunt of these tariffs, undermining our ability to sell our products at a competitive price and putting American jobs at risk," he said.
Similarly, the U.S. Chamber of Commerce criticized the tariffs.
John Murphy, the chamber's senior vice president and head of international, said the Trump administration's use of a 1977 emergency powers law, the International Emergency Economic Powers Act, as his authority for the tariffs is unprecedented.
"The president is right to focus on major problems like our broken border and the scourge of fentanyl, but the imposition of tariffs under IEEPA is unprecedented, won't solve these problems, and will only raise prices for American families and upend supply chains," Murphy said.
As well, automotive industry groups have warned of severe disruptions and higher vehicle costs from the tariffs.
Reuters reported that the American Automotive Policy Council wants vehicles and parts that meet the USMCA's domestic content requirements to be exempted from the tariffs.
"Our American automakers, who invested billions in the U.S. to meet these requirements, should not have their competitiveness undermined by tariffs that will raise the cost of building vehicles in the United States and stymie investment in the American workforce," said Matt Blunt, AAPC president.