Research
Pulp and paper caught in the cross fire of a new North American trade war
In a new executive order, President Trump imposed 25% tariffs on US imports of Canadian goods, including pulp and paper products. Canada responded with an equal tariff of its own. Pulp and paper products are heavily traded across the border, especially Canadian pulp and US folding carton. A trade war could impact short-term pricing and long-term capacity in the paper supply chain.
Pulp and paper are among the many sectors that will be affected by new US tariffs, should they go into effect. On February 1, 2025, President Donald Trump signed an executive order imposing 25% tariffs on imports from Canada and Mexico and 10% tariffs on Canadian energy and Chinese imports. Canada immediately announced a 25% retaliatory tariff on USD 20 billion worth of US imports, effective February 4, while preparing to extend the tariffs to USD 85 billion worth of American products. Some, but not all, pulp and paper products are included in the first round of Canadian retaliatory tariffs.
The North American countries agreed to pause the trade war for 30 days while they work to address US grievances around illegal immigration and drug flows at their borders.
Should the tariffs be implemented, there could be short-term supply and pricing impacts on the pulp and paper sector as well as long-term investment impacts, as the products are heavily traded within North America. In this article we share some initial thoughts about how the pulp and paper sector, especially its US and Canadian supply chains, could be affected by tariffs. We will continue to monitor this developing story.