Perc Pineda, PhD, Chief Economist, PLASTICS
October 21, 2025
When the U.S. announced higher tariffs on imports in the spring of this year, one of the main concerns was their impact on the industry supply chain. Should imports become more expensive, it might slow the flow of goods into the U.S.—and where tariffs are excessive—it could have significant adverse effects on supply chains, not only in the U.S. but globally. As of July 2025, the value of U.S. imports of plastic materials and resins, plastic products, plastics machinery, and molds decreased 1.0% year to date.
Plastics Production and Supply Stability
As far as the U.S. plastics industry is concerned, the shifts in U.S. tariffs and trade policy have not caused supply chain disruptions. In resin production, there was a 6.9% decrease in May year over year, followed by an increase of 0.7% in June and 7.6% in July year over year. With the U.S. being a net exporter of plastic materials and resin, higher tariffs have not impacted the economy’s supply of plastic materials, which account for roughly half of the cost of plastics conversion.
In the plastics industry value chain, one might speculate that higher tariffs would have a significant impact on plastics processing. The Industrial Production Index (IPI) for plastic products manufacturing increased in February and March but shifted to a decline thereafter. From a year earlier, plastic production rose 1.9% in March but fell 0.2% in April—remaining at negative growth rates—with a 2.7% pullback in August. Concerns over lower production might raise supply chain concerns; however, plastic and rubber products manufacturers’ finished goods inventories have remained virtually flat—valued at $15.7 billion in January and $15.5 billion in July. At these values, finished goods inventories in plastic and rubber products have not diverged much from their $16.8 billion post-COVID-19 peak in March 2023. In essence, supply chain bottlenecks, which could have developed because of reduced imports due to higher tariffs, appear to have been mitigated by available inventories.
Trade Flows and Capacity Utilization
Both resin and plastic products manufacturing supply chains have remained unaltered because of tariffs. This may not be surprising considering that trade flows, as the percentage of domestic shipments for resin and plastic products imports in 2024, were 17.4% and 20.5%, respectively, as shown in the recently released 2025 Global Trends Report on plastics trade.* Plastics equipment and molds for plastic production imports, on the other hand, had trade flows as a percentage of domestic shipments of 68.8% and 93.0%, respectively, which suggests that higher tariff rates on both could have a greater likelihood of causing supply chain disruptions. However, this has not happened so far, given that the capacity utilization rate in plastic products manufacturing has been low—meaning there is sufficient capacity to tap should supply chain disruptions occur via equipment and molds. This does not diminish the argument that the U.S. plastics industry needs imported production inputs—those that are not made domestically and to some extent to supplement domestic manufacturing. To transition to a 100% U.S.- made product in the short to medium term,the U.S. would need to allow imports of critical components, products, and equipment. This is where the longstanding question in economics—what is the optimal tariff rate?—comes in.
Global Supply Chain Context
What we are seeing in the plastics industry supply chain is not much different from the broader global supply chain conditions of the economy. Based on the Federal Reserve Bank of New York’s Global Supply Chain Pressure Index (GSCPI), over the last 12 months—from September 30, 2024, through September 30, 2025—the GSCPI standard deviation from its average value was 0.03, with a monthly average of -0.18 from the standard deviation. Simply put, when U.S. tariffs and trade policy changed earlier this year, the GSCPI did not change significantly.
If there were any indication that tariffs had negatively impacted the plastics industry supply chain, it would be reflected in prices. Based on the Producer Price Index (PPI) for plastic product manufacturing, however, prices increased by a modest 0.6% in August year over year, while the PPI for plastic materials and resin manufacturing was down 2.8% over the same period. It is not unlikely, however, to see upward price pressures if supply chains tighten due to prolonged higher costs of trade.
* See 2025 Global Trends Report. https://www.plasticsindustry.org/data-report/global-trends-2025/
