U.S. Tariffs and Their Effect on Eco-Friendly Paper Products

As you know, the U.S. has been locked in a trade war with China for quite some time now. Our government enacted significant tariffs on thousands of products imported from China in 2018. China responded with its own round of tariffs, which was followed by even more tariffs imposed by us.

The eco-friendly paper products we carry have been affected by the trade war to some extent. Fallout from the tariffs has by no means been devastating, but there have been consequences. We are doing our best to stay ahead of price increases so that our customers do not suffer unnecessarily.

How Tariffs Work

A tariff is essentially a tax placed on imported goods. The first round of tariffs implemented in 2018 imposed a rate of 25% on a lengthy list of products coming in from China. So a product purchased from a Chinese company for $100 before the tariff would cost $125 after. Those costs are paid by U.S. buyers.

The federal government claims that the total amount of the tariffs imposed against China represent less than 1% of projected inflation. When applied across the board to every product bought and sold in the U.S., the tariffs should have a negligible effect on overall inflation. Still, those products directly affected by tariffs now cost more.

Products and Raw Materials

Where eco-friendly paper products are concerned, there are a couple of things to consider. Right off the bat are finished products like cups, plates, napkins, etc. Finished products manufactured in China now cost more thanks to the tariffs. But that is not the end of it.

Companies that make eco-friendly paper products domestically might still import some of the raw materials they need for the manufacturing process from China. Many of those raw materials are also subject to the tariffs. This adds additional costs to the manufacturing process.

Whether you are talking finished products or raw materials, tariff costs are ultimately passed on. How much gets passed on to the end customer depends on whether or not others along the supply chain are willing to absorb some of the pain themselves.

How We Approach Higher Costs

Galaxie Coffee is no different to any other U.S. business in that we hate the idea of passing on higher costs to customers. We are not happy about the fact that a trade war with China means some of our eco-friendly paper products might cost more in the future. But it is what it is.

It is normal practice for us to do everything we can to keep retail prices in check. Sometimes that means we have to look for new suppliers who can offer us better pricing. Sometimes that means going with less expensive products from the same supplier. And sometimes it means absorbing part of a price increase so that what we pass on to customers is minimal.

Know that we are doing everything we can to control retail prices. Doing so is a long-standing Galaxie Coffee practice that we intend to continue.