Starting August 19, Canadian plastics shipped into the United States will carry a steep new cost.
President Trump signed three proclamations on July 20 adding a 50% tariff on a wide range of Canadian goods, according to a White House fact sheet. The tariffs fall under Section 338 of the Tariff Act of 1930, a law rarely used until now.
The move targets what the administration calls unfair Canadian trade practices in dairy, alcohol, and autos. But the reach goes much further.
Plastics packaging, rubber seals, and gaskets are on the list too — even though the proclamation is officially about motor vehicles, law firm Blakes noted in its July analysis.
That’s the part catching manufacturers off guard.
One law firm, Honigman, pointed out something else important: some press reports claim only about 5% of Canadian imports are affected. But hundreds of separate tariff codes are involved. That means many companies could be caught by surprise if they don’t check the specific lists.
For families and workers connected to plastics manufacturing, the timing matters. The tariffs apply even to goods that qualify for duty-free treatment under the USMCA trade deal — a break from past practice, according to McMillan LLP.
So is this a crisis for the plastics industry? The data suggests something more complicated.
A new industry analysis reported by PlasticsToday found the U.S. actually holds a trade advantage here. In 2025:
- The U.S. imported about $3.10 billion in tariff-affected plastics from Canada
- The U.S. exported about $4.65 billion in the same plastics categories to Canada
- That leaves a $1.55 billion trade surplus in America’s favor
Strong domestic production capacity means the disruption may be more limited than headlines suggest.
There’s also relief for one specific corner of the industry: recycling.
Industry publication ICIS reported on July 30 that most recycled resin and plastic scrap — including common recycled PET, PE, and PP categories — are currently excluded from the new Canadian tariff lists.
That matters because the U.S. recycling supply chain leans on Canada more than most people realize. ICIS found that imported PET scrap made up roughly 30% of the effective U.S. rPET supply in 2024, and Canadian recycled polyethylene has represented about 15% of U.S. recycled PE production since 2022.
The risk isn’t gone completely, though.
Recycled flake and pellet sometimes get imported under the same customs code as virgin plastic. That overlap means future tariff expansions, or shifts in how customs officials classify shipments, could still pull recycling into the fight — even without a new rule aimed directly at it.
For now, the safest way to describe the situation: plastics are exposed, but recycled material is mostly on the sidelines. Companies that rely on Canadian scrap and resin should still watch the full tariff schedule closely before August 19.