The word that will dominate supply chain conversations in 2025 (and possibly the next four to eight years) will be “tariffs”. It is no longer a market-by-market theme. Instead, due to the US administration’s “Liberation Day” on April 2 – intended to remedy trade deficiencies, increase US manufacturing advantages, and tighten down on weaknesses in trade policies from the country’s top trading partners – the world is upended as it relates to global commerce.

Liberation Day saw the unveiling of 10% universal global tariffs and reciprocal tariffs for specific countries ranging from 11% to 50%. The US has not imposed tariffs to this degree in over 75 years, and the proposed increases emulated the protectionist policies of 1922 and 1930, which had a dramatic effect on the US economy.

Effective April 10, those countries which had received country-specific rates greater than 10% – such as the EU (20%), Vietnam (46%) and South Africa (30%) – were given a 90-day reprieve. Absent a specific exclusion, imports from these countries will be subject to a 10% tariff from April 10 through July 8. Unless the US administration takes further action, the 10% rate for these countries will expire, and the higher country-specific rates will apply, effective 12:01am EDT July 9.

Meanwhile, the US and China have become embroiled in a tariff war. The US rate for reciprocal tariffs on China has increased to 125%, effective April 10. This 125% rate has no expiration date, so it will continue to apply unless and until the US administration takes further action.

Significant disruption

The tariffs are causing significant supply chain disruptions, affecting everything from fuel to aluminum and packaging materials like boxes and bottles. In fact, various packaging components like corrugated cardboard will experience hikes in costs and shortages as a result. The tariff policies and resulting uncertainty are driving up costs and risk causing inflation.

Additionally, exporting wine and spirits to key markets like Canada has become increasingly difficult, forcing more products into the US market. This surplus drives prices down as companies compete for placements and strive to increase depletions. Together, the rising costs and declining prices could pose a severe threat to the industry.

We continue to see this uncertainty play out with the six key indicators we measure monthly. In March, the US diesel cost per gallon dropped to $3.585 from $3.675 in February. Similarly, the ocean freight from Asia to the US on the West and East Coast has decreased significantly since last month. As mentioned above, the costs of individual packaging components, like corrugated cardboard, are experiencing meaningful increases. Glass is becoming more and more of a concern, especially from China and Mexico, and we are watching the cost of aluminum closely due to Canadian tariffs. Whether with Saxco or other vendors, securing contracts to guarantee supply quantity and prices is smart regardless of whether your vendor or brands may pay product premiums due to tariffs or sourcing changes.

As we enter the second quarter of 2025, the future seems more opaque than ever. We empathize with the challenging times and know that a stable supply chain is a crucial part of doing sustainable business in the longer term.

Bottled Tidbits – Because bottles have been around so long and all over the world, exploring stories about wine is a forever journey through history. This month, while exploring the history of the punt, we stumbled on a downloadable copy of the 1906 Illinois Glass Company bottle catalog. It’s a fantastic lens into the past and how much change has occurred while things have still remained the same.

One of the most interesting things is the quantity of bottle choices Illinois Glass presented, considering the first industrial glass production device – the Owens Glass Machine – had only been invented three years prior to the publication of this catalog. With a production of 240 bottles per minute, the machine was not only instrumental in changing the economics of glass manufacturing, it became one of the lesser-known inventions to change society forever. By improving the speed and cost of bottle availability, it greatly enhanced the distribution of medicine, dairy, beer, wine, spirits, chemicals, and more - and, as an accidental consequence, the increase in use of glass to catalyze so many other scientific advancements. 

tariffs packaging supply chain