How Global Tariffs Are Reshaping the U.S. Pulp & Paper Industry

Tariff policies around the world have notably altered the landscape of the American pulp and paper sector. While trade uncertainty and cost pressures dominate the headlines, certain exemptions, such as for wood pulp and related paper products provide much-needed relief and help stabilize supply chains.

Broad Impacts and Resilience through Exemptions

Since 2024 into 2025, tariffs imposed globally (especially by the U.S. administration) have elevated input costs and compressed margins for U.S. producers. For pulp companies like Mercer International and Rayonier Advanced Materials, executives report that higher raw material rates and volatility have forced postponements and lengthened contract timelines.

However, industry associations such as the American Forest & Paper Association (AF&PA) successfully lobbied for exemptions on imports of critical inputs, specifically wood pulp, recycled fiber (OCC), and finished paper and paperboard (Chapters 47 & 48 of HTSUS). These exclusions help secure essential supply and reduce disruption risk for U.S. manufacturers facing international tariffs.

Still, the indirect effects are felt: recycled fiber markets face broader uncertainty, with rising ocean freight and trade friction forcing manufacturers to rethink sourcing strategies.

Regional Shifts and Competitive Dynamics

As tariffs restrict imports from some regions, Mexico and India have gained increased access to U.S. buyers seeking alternatives to Canadian, Chinese, or European suppliers caught in tariff crossfire. In particular, Mexico’s pulp and packaging sector is scaling up to fill emerging gaps in the North American market.

For Europe, uncertainty over potential U.S. tariffs has led to a buildup of unsold inventory and shifting supply flows within Europe instead of to the U.S. market. Meanwhile, Canada maintains favorable footing under USMCA, helping Canadian suppliers remain competitive in key markets.

Commercial Consequences and Consumer Risk

Manufacturers like Procter & Gamble have already communicated that tariffs on fiber inputs may force price increases for tissue and hygiene products. Alarmingly, reports suggest possible toilet paper shortages in U.S. stores if pulp imports, particularly Brazilian eucalyptus pulp, are disrupted.

U.S. Tariffs and Their Specific Effects on Brazilian Imports

In mid-2025, the U.S. issued a sweeping new tariff policy: 50% tariffs on Brazilian imports, combining a prior 10% base with an additional 40% surcharge. However, key exemptions were included for wood pulp, paper, and paperboard, along with energy products and agricultural goods.

These exemptions preserved trade flows for crucial raw materials like pulp, notably from Brazilian companies such as Suzano, limiting immediate cost shocks for U.S. converters reliant on eucalyptus fiber.

Nevertheless, non-exempt packaging products and industrial paper items remain subject to high duties, raising costs for importers and potentially disrupting supply chains that support U.S. tissue and packaging manufacturers.

References

American Forest & Paper Association. (2024). AF&PA releases Q2 2024 paper industry outlook. Retrieved from https://www.afandpa.org/news/2024/afpa-releases-q2-2024-paper-industry-outlook

Office of the United States Trade Representative. (2024). Section 301 tariffs: Overview and current status. Retrieved from https://ustr.gov/issue-areas/enforcement/section-301-investigations/tariff-actions

U.S. International Trade Commission. (2023). Economic impact of trade agreements and tariffs on the U.S. paper and pulp industry. Retrieved from https://www.usitc.gov/publications/332/pub5392.pdf

Ministry of Development, Industry, Trade and Services (Brazil). (2024). Brazil's position on U.S. pulp and paper tariffs. Retrieved from https://www.gov.br/mdic/pt-br/assuntos/comercio-exterior/tarifas-papel-celulose-eua

The Observatory of Economic Complexity (OEC). (2024). Brazil exports of pulp and paper (2023). Retrieved from https://oec.world/en/profile/bilateral-product/paper/reporter/bra

Forest2Market. (2024). Global pulp and paper market trends – 2024 update. Retrieved from https://www.forest2market.com/blog/global-pulp-and-paper-market-trends-2024