PMMI ELC: OEMs Face High Stakes as Tariff Pressures Intensify
With tariffs fluctuating near historic highs, U.S. packaging OEMs face rising costs and complex supply chains. Learn what experts say about navigating trade risks and staying competitive in a turbulent global market.
Tariff hawks (upper right, red) and tariff moderates (upper center, green), and the master formula for new tariffs (lower left, yellow).
For U.S. packaging machinery OEMs, the global trade winds are blowing hard — and not in a favorable direction. Tariffs have surged to levels not seen since the Great Depression, and according to trade expert Shawn Marie Jarosz, founder and chief trade strategist at TradeMoves, LLC, this escalation demands urgent attention from U.S. equipment builders.
She spoke today to a room full of PMMI members, builders of packaging and processing equipment generally in the North American market, as part of the Executive Leadership Conference in Sea Island, Ga. Shawn Marie Jarosz of Trade Moves, LLC, called it a “trade-stopping” environment — with some imported components facing 100%+ tariffs.
Packaging OEMs Squarely in the Crosshairs
“This is a day of history,” Jarosz stated, opening her candid briefing on the morning of April 9, 2025, only hours after learning of China’s overnight reciprocal escalation. “Tariffs have never been as high as they are today on goods coming into the United States.”
While U.S. packaging OEMs may benefit from USMCA duty-free status for domestically manufactured machines, Jarosz warned that critical inputs and components — particularly from countries like China, Germany, and even Canada — are now under intense tariff pressure.
“Trade’s not going to come in at a 104% tariff,” she emphasized, describing the “trade-stopping” effect of compounded tariffs on key machinery imports and parts. For OEMs sourcing electrical components, stainless steel couplings, or motor parts abroad, these costs stack rapidly.
The “Layering Effect”: A Supply Chain Squeeze
Jarosz detailed the layering effect — a compounding scenario where multiple tariffs accumulate across the supply chain. For packaging OEMs, this could mean tariffs on both finished equipment and the parts used to build them.
Illustrating this, she pointed to filling, capping, and closing machinery, a cornerstone of many OEM portfolios:
“If the product is coming in from China, for instance, you’re looking at a 104% tariff,” Jarosz noted. “From Germany, you might face a 45% delta, and from Canada, it depends on USMCA qualification, but steel and aluminum inputs still carry a 25% hit.”
Even U.S.-based manufacturers aren’t immune, especially if they rely on foreign-sourced components now caught in the tariff web.
Mitigation Strategies for U.S. OEMs
While the environment is undeniably volatile, Jarosz offered a pragmatic playbook for packaging OEMs:
•Audit Your Supply Chain. Understand every component’s origin and tariff exposure. “It’s not just about U.S. tariffs — it’s about retaliation from other countries,” Jarosz advised.
•Leverage USMCA Compliance. U.S. machinery generally enjoys duty-free treatment under USMCA, but maintaining records and certifications is critical to ensure compliance.
•Consider Duty Drawback. For OEMs exporting finished machinery, drawbacks can refund some import duties on components.
•Scrutinize Invoicing and Broker Practices. Customs is closely watching valuations and invoicing processes. Ensure accuracy to avoid costly penalties.
Jarosz also recommended exploring alternative sourcing and maintaining flexibility. “Some industries are taking a wait-and-see approach, but that’s not a long-term strategy,” she cautioned.
The Road Ahead: More Uncertainty
The uncomfortable reality, Jarosz concluded, is that OEMs should brace for more changes. “New tariffs are more likely coming, even if this tumultuous period starts to normalize,” she said.
She also underscored the weaponization of trade for broader geopolitical aims, from economic policy to immigration and national security. “Trade is being weaponized for different ends,” Jarosz explained, “and that creates chaos for business planning.”
Her closing advice for U.S. packaging OEMs was unequivocal:
“Understand your supply chain as well as you can. Because this isn’t just about the U.S. — it’s about how countries will retaliate.”
With uncertainty likely to persist, packaging machinery manufacturers will need to stay agile, informed, and proactive to weather the storm — and to seize any competitive edge amid the turmoil.
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Shawn Marie Jarosz of Trade Moves, LLC, called it a “trade-stopping” environment — with some imported components facing 100%+ tariffs.
