On April 2, 2025, US President Trump announced comprehensive import tariffs that had long been feared.
According to Trump, the goal is to restructure US trade policy by implementing extensive tariffs, collectively called the “Liberation Day” tariffs.
This initiative introduced a universal 10% tariff on all imports, effective April 5, 2025, with additional country-specific tariffs targeting nations with significant trade imbalances with the United States. A flat 10% tariff will apply to all imports, but many countries outside of North, Central and South America will face higher import tariffs.
The administration justified the newly implemented measures as essential to rectify longstanding trade deficits and promote the US economy’s reindustrialization. President Trump characterized the tariffs as a response to a “national emergency,” asserting that they would bolster domestic production and generate substantial revenue to reduce taxes and national debt.
The debate over import tariffs has been a long-running issue for Trump. During his first term, he imposed tariffs as part of his protectionist trade agenda, targeting key allies and rivals alike. His administration levied steep tariffs on steel (25%) and aluminium (10%) from the EU, Canada, Mexico, Japan, South Korea and Turkey, sparking retaliatory measures.
The most aggressive tariffs were reserved for China, with duties on over $360 billion worth of goods, escalating a prolonged trade war over intellectual property and trade imbalances. At that time, Chinese tissue producers were able to deal with the 25% tariffs imposed on their tissue exports to the US and ultimately increased tissue exports to the US despite the Biden administration maintaining the import tariffs.
However, the newly announced tariffs’ scope and magnitude have the potential to substantially alter tissue import sources to the United States. Canada, China and Indonesia are among the largest sources for imports to the United States, and Vietnam and Malaysia recently commenced higher shipments as well. Of the Latin American countries, only Mexico has significant tissue trade with the US.
With the introduction of the new US tariff regime, considerable volumes of Asian exports to the US could be replaced by exports from Canada, Latin America, Turkey and potentially the United Arab Emirates and Saudi Arabia. The latter three countries and Latin America only face import tariffs of 10%, while major Asian countries with the exception of Singapore (10%) face import tariffs of 24% to 57%.
The US domestic tissue industry will only be able to partially offset the loss of 690,000 tonnes of Asian tissue imports itself, as domestic producers are already operating at rate of 95%, according to our preliminary figures for 2024. However, tissue producers in Latin America and Turkey have significantly increased tissue production capacity and are well positioned to replace Asian shipments to the US.
As a result, the issue is no longer whether Asian tissue imports to the US will drop, but rather by how much.
Although Chinese tissue producers had been able to increase exports to the US despite the 25% tariffs, under the new tariffs, they will potentially be the most harmed of the Asian exporters, given that the tariffs on Chinese goods have been raised to 57%. Imports from Indonesia will be less affected due to the very low production costs at some integrated tissue producers.
On the other hand, the imposed tariffs are an unexpected gift to tissue producers from countries subject to only 10% import tariffs. These suppliers could replace some of the Asian exports to the US thanks to their more favorable conditions.
A glimmer of hope for Asian tissue exporters could be President Trump’s unpredictability. As already seen with Canada and Mexico, Donald Trump has imposed and then lifted punitive tariffs within a couple of days. Asian countries might be able to get their import tariffs reduced if they were able to enter into a “deal” that President Trump viewed as advantageous for the United States.
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