Plastic Bottles
Sourcing Guide & Market Intelligence

United States imposes sweeping tariffs on Canada and Mexico

• In February 2025, the United States announced 25.0% tariffs on imports from Canada and Mexico, which took effect on March 4, 2025.
• The tariff by the United States applies to all merchandise imported for consumption and applies in addition to other duties or fees that are in place. However, imported goods covered under the United States-Mexico-Canada Agreement (USMCA) will be exempt from tariffs until April 2, 2025.
• After the tariff took effect, Canada immediately imposed 25.0% tariffs on goods imported from the United States. Mexico also announced plans to impose retaliatory tariffs and non-tariff measures on imports from the United States later this month.
• On March 12, the United States raised tariffs on steel and aluminum imports from all countries to 25.0%, including Canada and Mexico.
• This market sources goods from an affected country. As such, ProcurementIQ will continue to monitor developments in this space and update analysis accordingly.

Canada and Mexico tariffs to negatively impact food and beverage industry

• On March 4, 2025, the United States imposed a 25.0% tariff on goods imported from Canada, which applies in addition to other duties or fees that are in place; however, as of March 6, 2025, all goods compliant with the United States-Mexico-Canada Agreement (USMCA) will be exempt from tariffs until April 2, 2025. Since Canada and Mexico are the major trade partners for US food and beverage companies, tariffs are expected to disrupt industry supply chains and increase costs, which are passed on to buyers.
• According to the US Department of Agriculture, Canada and Mexico are the first and third largest suppliers of agricultural products, respectively, and account for 42.0% of US food and beverage imports. Canada accounts for the largest share of meat exported to the United States (34.7%), while 77.0% of fresh vegetables were imported from Mexico and 11.0% were imported from Canada.
• Mexico and Canada account for 40.0% of US dairy exports, and Mexico accounts for 81.0% of beer imported to the United States. Canada is a major supplier of oats, accounting for 97.0% of US imports, and Mexico is a major supplier of flavored waters and liquors.
• Tariffs on goods from Canada and Mexico will broadly affect related food and beverage equipment and machinery due to the increased costs for raw materials and components. Higher tariffs have forced companies like Coca-Cola to redesign packaging, such as using plastic bottles, to mitigate the impact of higher tariffs.
• Industry players will face higher costs adjusting supply chains to mitigate the impact of tariffs. This can lead to increased operational expenses and further contribute to the overall rise in prices for buyers.

Crude oil and fuel prices dip in 2024 while volatility persists

• Coming off an 8-month run of oil production cuts from OPEC+ countries, select countries announced a continuation and additional cuts in production until the end of 2024. Production cuts will help keep oil prices elevated throughout the year.
• Ongoing conflict between Hamas and Israel and general unrest in the Middle East is causing uncertainty surrounding oil prices has been leading to volatility in prices. In the fourth week of December 2024, crude oil prices hit $70.27 per barrel, but volatility remains as geopolitical concerns remain.
• Following steep declines in the last quarter of 2023, natural gas prices rallied in 2024 as the United States faced high demand, topping out at $3.13/MMBtu in mid-June. Prices have since increased further following forecasts for colder-than-usual temperatures in the United States, rising to $3.38/MMBtu in the fourth week of December 2024.
• Gas prices have been extremely unstable in 2024 due to events such as OPEC+ announcing oil production cuts leading to a price rally and producers increasing production rates applying downward pressure on prices, followed by subsequent declines as demand for oil from China wanes. However, while geopolitical tensions fuel instability crude oil prices, weakening demand from China has been driving down gasoline prices, hitting a national average of $3.03 per gallon in the fourth week of December 2024.