The global trade environment faced significant upheaval in early 2025, as the United States implemented broad tariffs, triggering swift retaliation from major trading partners like Canada, the EU, and China. For the U.S. paper and packaging industry, this presents a complex set of challenges: higher costs for imported materials like pulp and certain paper grades, disruptions to deeply integrated supply chains, squeezed profit margins, and diminished competitiveness in key export markets.
Managing this volatile landscape demands more than just reactive adjustments; it requires a proactive, strategic approach focused on building resilience and optimizing operations.
Information technology emerges as a critical enabler, providing the tools and insights needed to adapt and thrive across the short, medium, and long term.
What the U.S. paper and packaging industry needs to do right now
The first priority is understanding the immediate shockwaves and stabilizing the business, starting with conducting a comprehensive tariff impact assessment. This involves meticulously mapping the entire supply chain, identifying suppliers across all tiers, correctly classifying imports and exports to determine applicable duties, and quantifying the financial hit from both US tariffs and foreign retaliation.
IT plays a vital role throughout this process:
- Supply chain risk software helps visualize complex dependencies, while scenario planning tools allow companies to model various tariff outcomes and pinpoint critical vulnerabilities. For example, mills in certain regions or product ranges depending on essential raw materials with tariffs might no longer be profitable. Or US raw materials might become scarce.
- AI-powered analytics can rapidly process complex cost impacts across numerous products and suppliers, providing clarity much faster than manual methods.
- Engaging transparently with customers about potential cost adjustments and collaborating with suppliers on contingency plans requires robust communication channels.
- Companies can consider dynamic and AI-supported pricing solutions such as PriceFX or Vistex. Collaborative supply chain platforms facilitate this by enabling real-time data exchange on inventory, lead times, and potential disruptions.
- Reviewing inventory strategy is another priority. Companies must consider potential supply disruptions and cost increases, including strategic pre-purchasing or building safety stocks for critical items. Inventory management systems and analytics help model the cost-benefit trade-offs, while specialized software can manage utilizing Foreign Trade Zones to potentially defer or reduce duties.
- Finally, shoring up cash flow management through rigorous financial planning, supported by FP&A software, provides flexibility to navigate the financial pressures.
From entrepreneurs to enterprise, industries are soaring in the cloud.
Grow with the brand that 96% of reviewers would BUY AGAIN.
Adaptation + optimization enabled by IT
Once the initial impact is assessed, the focus for the U.S. paper and packaging industry shifts to adapting operations and enhancing efficiency. Implementing supplier diversification is key, moving beyond assessment to actively qualifying and onboarding alternative suppliers in lower-risk regions.
IT streamlines this process through source to pay and supplier risk management platforms, which help identify, vet, and manage new partners while assessing their reliability and risk exposure.
Improving operational efficiency helps offset external cost pressures. This involves tackling major expense areas like energy, manufacturing waste, logistics, and labor productivity. IT provides a suite of tools for this: manufacturing execution systems improve shop-floor control, asset performance management transportation management systems optimize routes, and predictive maintenance tools minimize equipment downtime.
This phase is also the time to pilot and adopt key technologies such as:
- Dynamic pricing engines to respond to cost volatility
- Advanced collaborative platforms for deeper supply chain visibility
- AI/ML-based demand forecasting and inventory optimization tools for improved accuracy in uncertain markets
Exploring alternative export markets less affected by retaliatory tariffs, such as those in Southeast Asia or Latin America, requires thorough research and outreach, supported by market intelligence platforms and customer relationship management systems.
Lastly, contract lifecycle management software can streamline the renegotiation of commercial agreements with suppliers and customers to reflect new cost structures and incorporate flexibility.
On the sales side, other solutions that can help include configure price quote applications or platforms like PriceFX or Icertis Contract Intelligence.
Building enduring resilience with integrated IT
The long-term vision for P&P companies involves embedding resilience and agility deep within the business model, leveraging fully integrated technology. This includes making definitive decisions on supply chain reconfiguration, potentially involving significant investments in nearshoring or reshoring.
Advanced supply chain network design and simulation software is invaluable here, allowing companies to model the total cost and risk implications of different configurations before committing capital.
Moving beyond pilots, companies must achieve full technology integration with seamless data flow between ERP, SCM, CRM, pricing engines, and analytics platforms. This often requires investments in data warehousing, integration platforms (iPaaS), and master data management. Continuously evaluating and adopting next-generation AI and automation helps for competitive edge.
Driving product innovation, particularly towards sustainable and higher-margin solutions, creates differentiation beyond price. Product lifecycle management software supports the innovation pipeline.
Ongoing policy monitoring, aided by risk intelligence platforms, and embedding a culture of resilience, supported by integrated risk management (IRM) platforms and AI-powered monitoring tools, ensures an organization is prepared for future disruptions.
U.S. paper and packaging industry: Turning disruption into advantage
The tariffs, while disruptive, act as a powerful catalyst for necessary transformation in the U.S. paper and packaging industry. Companies that proactively embrace strategic adaptation—diversifying supply chains, optimizing operations, seeking new markets, and innovating—will be far better equipped to manage the current volatility.
Information technology is the linchpin, providing the essential visibility, agility, and data-driven insights required at every stage. By strategically investing in and integrating technology, P&P companies can mitigate tariff risks and also build a more resilient, competitive, and future-proof business, ultimately turning today’s challenges into tomorrow’s competitive advantage.