You don’t normally associate the words “tariffs” and “plastic packaging” but that’s exactly what many US plastic injection molding companies want President Trump to do in order to retaliate against China’s aggressive intellectual theft and government subsidies of their home-grown plastics companies. In fact, Pactiv LLC, one of the biggest U.S. plastics companies, is making the case for tariffs on a whole host of Chinese injection molded and thermo-formed packaging, including cutlery and other food-associated plastic products.
According to Pactiv officials, an influx of imports from China has forced their company to shutter factories and spend millions of dollars in legal fees fighting Chinese imports that violate Pactiv intellectual property. These officials claim China is dumping massive quantities of plastic packaging at below-market prices, stealing market share and decimating Pactiv’s bottom line.
Pactive executives want nothing less than tariffs of at least 25 percent on the products, as opposed to the 10 percent rate the U.S. had first proposed.
There are seven product categories in all that American plastic injection molders want protected by tariffs: four that are in the current U.S. plan, plus three additional food-based categories, including cups and eating utensils. The tariffs could kick-off in late September or early October and would be in addition to tariffs already in place against Chinese plastics resins, injection-molding machinery and the actual molds themselves.
While some in our industry applaud the move, others are wary. They say the “on-shoring” of plastic products like cutlery is bound to increase prices, especially at American fast food outlets. They say the reason so many plastics maker off-shored those items in the first place was because manufacturing them was low-tech, high human labor costs, with slim profit margins.
Whatever the outcome of tariffs, plastics manufacturers throughout our industry are being urged to weigh in on the debate.