After the US government announced the imposition of so-called "reciprocal tariffs" on Chinese goods exported to the US, the Chinese government announced on April 4 that starting from 12:01 on April 10, 2025, a 34% tariff will be imposed on all imported goods originating from the United States on the basis of the current applicable tariff rate.
Goods that have been shipped from the place of departure before 12:01 on April 10, 2025 and imported before 24:00 on May 13, 2025 will not be subject to this round of tariffs.
Pulp and paper products imported from the United States are also within the scope of this round of tariff increases. According to customs data, the total amount of pulp and paper products imported by China from the United States in 2024 was approximately US$1.895 billion, accounting for approximately 6.49% of China's total pulp and paper imports. Among them, coniferous pulp (including fluff pulp), kraft paper, hardwood pulp and white cardboard are the relatively large categories of pulp and paper imported by China from the United States.
Short-term market pauses and waits
Since Trump successfully ran for a second presidential term, the markets of China and the United States have predicted the outbreak of a potential trade war, but the tariff increase announced by both China and the United States this time still exceeded market expectations.
In the short term, the market will expedite orders for goods that can be shipped before the tariffs take effect, and temporarily shelve orders that cannot be shipped in time. Given the volatile policies of the Trump administration and the uncertainty of trade negotiations between China and the United States, the current general attitude of the market is to wait and see, and discuss follow-up plans after the situation becomes clearer.
Possible direct impact of the implementation of additional tariffs
If China and the United States cannot reach an agreement to suspend additional tariffs in the short term, such a large increase in tariffs will inevitably lead to a significant increase in the cost of imported pulp and paper products from the United States. Due to the different dependence of market segments on products from the United States, the impact on different products may not be the same.
Based on the different dependence on American products, we roughly divide pulp and paper products imported from the United States into three tiers. The first tier is fluff pulp, and the Chinese market has a high dependence on American fluff pulp. The second tier is mainly kraft linerboard, bleached softwood pulp, white cardboard, and natural softwood pulp. American products have certain competitiveness in these market segments. Other pulp and paper products belong to the third tier, and American products are more easily replaced by other sources or domestic products.
For the first tier of fluff pulp market, it is difficult for Chinese importers to find products that can replace American fluff pulp in large quantities in the short term, especially in the field of high-end products. The United States is the world's largest exporter of fluff pulp and the main source of fluff pulp supply in China and Europe. If the additional tariffs are implemented, Chinese downstream users may increase their purchases of fluff pulp from Canada or China. In recent years, some low-end and mid-end terminal demands have been replaced by domestic fluff pulp, which may provide Chinese buyers with some room for negotiation in price negotiations. However, in the absence of sufficient substitutes, Chinese buyers face greater potential cost pressure.
For the second-tier product category, American products such as kraft linerboard, coniferous and broadleaf pulp, and white cardboard are quite competitive in the high-end fields of their respective market segments due to quality and supply stability. However, due to the large increase in tariffs this time, Chinese buyers will inevitably actively seek other sources or domestic products for substitution to reduce potential cost pressure. Price negotiations between Chinese buyers and American exporters in this category of market will be more intense. For this tier of products, if the tariffs are implemented, the import volume from the United States will show a significant decline, but there may still be some rigid demand.
For the third tier of products, American products have limited competitive advantages in the Chinese market and the import volume is not large. Chinese buyers can relatively easily find other sources or domestic products for substitution. For this type of products, with the implementation of the tariffs, the import volume from the United States may be greatly reduced, with limited impact on China's overall users.
In addition to the above market trends that may appear in the short and medium term, given the volatile policies of the Trump administration and the combined impact of the trade war between the two major economies of China and the United States on the global macroeconomic environment, the direct and indirect impacts of relevant policy changes on China's pulp and paper industry may be more complex and changeable. For example, the impact of the damage to the export trade to the United States on the domestic paper packaging supply and demand pattern, whether the compromise negotiations between Southeast Asia and the United States on "reciprocal tariffs" will change the direction of pulp and paper trade, etc., are all worthy of continued attention.
