Are tariffs bad for the North American plastics industry? That definitely depends on your perspective. There will be winners and losers in this on-again, off-again trade war, and there will be plastics companies on both sides.
Honestly, just trying to figure out which tariffs are real and which ones are bluffs has been exhausting these past few weeks. It's not surprising that a lot of companies in the plastics supply chain are still taking a wait-and-see approach.
In general, most of our U.S. readers like tariffs, since most of our readers are U.S. processors. Tariffs potentially mean reshoring manufacturing, and that means business opportunity. If demand rises for U.S.-made food, medical products, toys, appliances, housewares and building products, then that's good news for our readers.
That's complicated by supply-chain disruptions and higher costs, but processors are figuring they should be able to pass along price increases. That may depend on the economy, of course.
U.S. mold makers love tariffs, too — at least when they target Chinese competitors. But tariffs on steel and aluminum mean higher costs. Tariffs on cars and auto parts from Mexico and Canada mean bad news for OEMs and Tier 1s, and that's probably bad news for automotive molders and toolmakers, too.
The tariff story is more complicated in resin markets. U.S. resin suppliers don't need tariffs to be competitive; they're already low-cost suppliers thanks to cheap shale gas and massive economies of scale.
Polyethylene is the highest-volume plastic resin and offers a great example: Exports of PE resin from the U.S. and Canada reached an all-time high of almost 47 percent of total production in 2024. That makes polyethylene a prime target for retaliatory tariffs, if the U.S. starts a trade war.
Resin companies have invested a lot in U.S. production already; tariffs aren't needed to protect local suppliers. And the cost difference is so great to making resin here that U.S. suppliers will still make a profit on what they export, even with tariffs. They just won't make as much.
The machinery sector will be very interesting to watch if this trade war really takes off. Will we see a resurgence in business for the handful of U.S.-based machinery companies? Or will European and Asian competitors shift more production to the United States to avoid tariffs? That's already a trend, although some have invested in Mexico, not the United States.
I'm still not sure what's going to happen. Tariffs on Canada and Mexico? They're on one day and delayed the next. President Donald Trump's plans for reciprocal tariffs on every country in the world? That seems pretty complicated, but his administration is moving very fast.
In the big picture, I don't support high tariffs. The free market is the best mechanism for raising the standard of living, encouraging democracy and rewarding hard work. Free trade encourages efficiency and inspires stability around the world.
As Trump's 2025 trade wars continue to shape global trade, the North American plastics industry finds itself caught between opportunity and risk. Tariffs promise to reshape global supply chains. There will be winners and losers. And we've come to the point where plastics companies need to anticipate how they'll be affected and make the best of the situation.
Don Loepp is editor of Plastics News and author of the Plastics Blog. Follow him on X @donloepp.