The ongoing trade dispute between the United States and Canada is putting additional pressure on the U.S. paper products sector, with several categories of tissue, hygiene and converted paper products facing new Canadian tariffs of up to 50%.
After trade negotiations between the two neighboring countries collapsed, Canadian Prime Minister Mark Carney vowed that Canada would defend itself against steep U.S. tariffs, and match them “dollar for dollar.”
Canada followed through, announcing retaliatory tariffs of up to 50% on roughly 700 U.S. imports worth about $20 billion annually. The measures are scheduled to take effect on Sept. 8.
The United States and Canada have an estimated $900 billion in annual trade, with Canada importing approximately $272 billion worth of U.S. goods each year. The new tariffs are expected to affect a broad range of industries, including industrial, agricultural and automotive products.
PAPER PRODUCTS AMONG THE SECTORS MOST EXPOSED
Paper products are among the categories facing some of the steepest tariffs under Canada’s new measures. Toilet paper imported from the United States will be subject to a 25% tariff, while some facial tissue stock will face duties of up to 50%.
Other tissue and paper-based hygiene products, including handkerchiefs, cleansing or facial tissues and towels, will also face a 25% tariff.
The measures come as the United States and Canada remain deeply interconnected across the pulp, paper and tissue supply chain. The U.S. relies heavily on Canada for wood pulp and timber used to manufacture paper products, while major American retailers, including Costco, source a significant share of their paper products from Canadian suppliers.
According to World Bank trade data, the United States imported $328 million worth of toilet paper from Canada in 2024, making Canada the largest exporter of the product to the U.S.
The new tariffs could affect not only trade flows between the two countries but also the cost structure of paper and tissue products across the North American market. Canadian buyers may turn to domestic suppliers or other countries, potentially reducing demand for U.S.-made products.
The impact extends beyond tissue and hygiene products. With the back-to-school season underway, a range of school and office paper products, including notebooks, letter pads, binders, folders and file covers, will face 50% tariffs when entering Canada.
The measures are part of Canada’s broader response to U.S. tariffs and are intended to mirror the value of the duties imposed by the Trump administration on Canadian goods.
For U.S. paper manufacturers, converters and exporters, the new duties add another layer of uncertainty to an already highly integrated North American market. The measures could affect sales, sourcing decisions, production levels and supply chains on both sides of the border.
