A Strategic Playbook for Rigid Metal Packaging Under U.S. Tariffs

The U.S. signaled a new era of aggressive sectoral tariffs in 2025, imposing a sweeping 50% tariff on imported steel and aluminum from nearly all countries.1 Only the U.K. and Mexico were exempt. 

In August, 407 additional derivative steel and aluminum products were subjected to the same rate. This was in addition to a universal 50% tariff on semi-finished copper and copper-intensive goods.2 While the EU secured a 15% tariff on autos, pharmaceuticals and semiconductors under recent trade negotiations, 50% tariffs on steel, aluminum and copper remain.3 

For suppliers, this is a structural reset, with implications for sourcing strategy, supply continuity, ESG goals and customer pricing models. 

This blog outlines the tariff resilience playbook for rigid packaging procurement leaders. It combines scenario analysis, GEP’s phased strategic response and real-world insights from global clients. The objective: move from reactive firefighting to long-term sourcing resilience and competitive advantage.

Why the Tariff Shift Demands Immediate Action 

In 2024, the U.S. sourced nearly 47% of its aluminum and 13% of steel through imports.4 Those commodities were thus highly vulnerable to changes in international trade policy. Canada and Mexico have historically been stable supply bases, but the latest tariff structure challenges these assumptions. Mexico (goods that meet North American trade rules) remains exempt for now. But other nations, including long-standing trade partners, fall within the tariff net. 

The U.S. has limited domestic primary aluminum capacity. Just four smelters remain, and only two operate at full capacity.5 Recycled aluminum now accounts for 83% of domestic output,6 providing a cost-effective way to mitigate disruption. However, it cannot fully offset the immediate impact on material availability and pricing. 

And there’s another layer: the threat of retaliatory tariffs. If companies don’t get ahead of it by running cost models, rethinking sourcing origins or expanding recycled content, they’ll feel it in shrinking margins, higher compliance risk and unstable downstream supply. The time to address those risks is now, before the disruption escalates. 

The U.S. and Its Competitive Landscape 

With tariffs rising and ESG demands increasing, it’s critical to understand the U.S. position relative to key markets: 

United States 

Anchored by major players like Ball and Crown, the U.S. is more and more dependent on aluminum and steel imports. Aging domestic infrastructure and constrained capacity compound the problem.7 

China 

Chinese exports were once the leaders in terms of cost. Now facing the harshest U.S. tariffs, their competitiveness in the American market has significantly eroded. 

Europe (Germany, UK, France, Italy) 

These markets offer high-quality supply and strong ESG alignment. While costlier, they are viable diversification options for risk-averse buyers.

Asia (Japan, India) 

Japan offers process innovation and quality, while India is emerging as a scalable, cost-effective alternative that is ready to expand its exports. 

The U.S. now faces a situation where it has to balance cost, compliance and continuity, often at the expense of long-held sourcing norms. 

Tariff-Heavy Imports vs. Domestic Sourcing: An Illustrative Example of Cost 

Aluminum beverage cans from top overseas suppliers like China or UAE cost around $0.20/unit on average.9 However, when you factor in 50% tariff and typical logistics costs (~$0.02/unit), the total landed cost rises to $0.32/unit. In contrast, domestically sourced aluminum cans cost around $0.28/unit, despite higher U.S. energy and labor costs.

The old import advantage is gone. With tariffs, bringing cans in from abroad now costs about 14% more than buying them at home. That forces companies to rethink their playbook. Imports might still make sense for certain grades or to cover shortfalls, but they now carry heavy financial and policy baggage. On the other hand, domestic sourcing supports supply chain resilience, avoids tariff shocks and aligns with ESG and reshoring goals, although rising demand could put pressure on U.S. capacity and prices. 

Recommended Tactical Response for Mitigating Tariff Exposure 

With the cost gap between imports and domestic supply narrowing or even reversing, supply chain leaders have to move fast. This structured, three-phase response is ideal to reduce the cost pressure: 

Act Fast and Grab the Quick Wins 

Start by mapping your tariff exposure: Section 232 metals, Section 301 China goods and anti-dumping duties at the SKU and supplier level. Then move quickly: file exclusions, reclassify goods, reroute through smarter ports, or shift volume to Mexico or the U.K. These moves won’t solve everything, but they’ll ease the pressure right away. 

Diversify and Dual-Source

Here's how to lower supply risk: prequalify suppliers in tariff-exempt or lower-risk geographies and embed compliance checks into sourcing and leverage dual-sourcing models. If you're moving enough product to make it worthwhile, setting up final assembly or finishing work in North America can help you avoid tariffs on your end products. 

Build Long-Term Resilience 

Cut your exposure to unpredictable global markets by sourcing more recycled materials and building supply chains that reuse and recycle products. To support agility, contract structures should include trade risk clauses and reopener mechanisms. In addition, technologically mature procurement processes will enable them to dynamically monitor tariff scenarios and take action based on data. Cross-industry collaborations will shape trade policy in favor of supply stability. 

From Compliance to Competitive Edge: Embedding Resilience in Supply Networks 

With the U.S. increasing Section 232 tariffs to 50% for most countries (excluding Mexico and the UK), short-term fixes aren’t enough; packaging companies must embed structural resilience into their supply chains. 

Diversifying into ASEAN and LATAM markets makes compliance and logistics more complicated, and it doesn't appear to reduce risk exposure. Instead, companies can build resilience by utilizing trade frameworks like USMCA, either to source raw materials or set up light conversion operations in Mexico to benefit from duty-free treatment. 

Onshore, steel and aluminum production in the U.S. is transforming, thanks to over $10B in investment created by tariff pressures. Packaging suppliers should lock in pricing and availability with domestic producers through forward contracts and long-term deals. With less scrap metal being exported, there's also an opening to invest in domestic recycling to cut costs and boost sustainability. 

To succeed, companies need to build adaptable cost models with index-linked pricing, pass-through clauses and material substitutions. Making use of AI and real-time sourcing intelligence will enable them to make decisions faster and navigate global trade. 

Compliance isn’t enough any more to mitigate the risks from persistent tariffs and shifting trade alliances. Supply chain leaders must leverage policy pressure to become more flexible, diversified and innovative in order to gain a lasting competitive edge. 

Navigating Trade-Offs: Tariffs, ESG and Supply Resilience 

While tariffs have narrowed the cost advantage of ASEAN exports, countries like Vietnam remain strategically valuable for U.S. buyers seeking to diversify risk without fully exiting China. For many importers, Vietnam offers a middle ground: tariff reduction, flexible production and access to high-volume capacity. 

Extended supply routes from Southeast Asia can increase emissions and complicate ESG compliance. In contrast, nearshoring to Mexico or reshoring to the U.S. enhances supply reliability, reduces carbon footprint and unlocks tariff advantages under USMCA. 

Supply chain leaders must balance lower-cost overseas suppliers against regional ones that can better meet sustainability targets and offer better resilience. The best strategy is a hybrid approach: using flexible Asian suppliers for volume and cost, while building closer relationships with suppliers in Mexico and Canada for sustainability. 

For example, Ball Corporation is aligning ESG and sourcing through partnerships and recycling programs. Its "Toward a Perfect Circle" initiative targets 85% recycled aluminum content in beverage cans by 2030, and the company is pushing for a 90% global recycling rate8 to support this goal. Ball is also working with low-carbon aluminum producers to reduce emissions and improve supply chain transparency. 

Smart companies know they can't have everything—cost, speed, and zero risk. The winners will be those that create sourcing strategies based on solid tariff data while still meeting their environmental commitments and staying close to key markets. As supply chains become more regional, businesses need to move away from the old global model and instead build around strategic regional centers that give them the right mix of reasonable costs, manageable risks, and sustainable practices. 

Scenario Playbook: GEP’s Recommendations 

Packaging supply chains need to increase their agility in order to handle increased tariff and sustainability pressures. To help leaders make informed decisions tailored to their sourcing mix and long-term strategy, we've developed this scenario playbook for navigating the trade-offs between cost, risk and resilience. 

What's Coming Next on Trade Policy 

The tariff situation isn't going to settle down anytime soon. Between changing alliances around the world, aggressive climate goals, and Washington's push to rebuild American manufacturing, we're looking at continued volatility in trade rules. The current trend points toward more support for domestic production through a mix of tariffs on competitors and incentives for U.S. manufacturers. Here are the big things to keep an eye on: 

China Tariffs Aren't Going Anywhere 

The administration has kept most of the existing China tariffs and actually added new ones in areas they consider strategic—think EV batteries, rare earth minerals, and certain aluminum products. Don't be surprised if they expand this to other sectors that rely heavily on Chinese suppliers.

New Friends, New Trade Deals 

Washington is actively courting countries in Southeast Asia, India, and Latin America as part of what officials call "friend-shoring." Companies sourcing from these regions might see faster customs processing or even tariff breaks down the road as these relationships develop. 

Climate Rules Will Reshape Trade 

Get ready for carbon-focused trade measures similar to what Europe is rolling out with its carbon border adjustments. Companies that can show lower emissions, recycling capabilities, or circular business models will likely get preferential treatment as these policies take shape. 

Tightening Trade Enforcement 

Scrutiny on country-of-origin reclassification and transshipment practices is likely to rise, especially in the aftermath of the “China+1” sourcing shift. As a result, companies must bolster trade compliance capabilities. 

Conclusion 

Geopolitics, climate policy, protectionism: all of it is reshaping supply chains at once. In this environment, checking the compliance box isn’t enough. Resilience has to be built in, not bolted on. 

Leaders can build lasting competitive strength by taking clear steps: mapping tariff risks, redesigning sourcing hubs, weaving ESG into procurement, and using digital tools to run scenario planning. The right strategy isn’t simply about choosing between cost and compliance—it’s about finding a workable balance between cost, carbon, and continuity. 

The companies that will thrive are those that turn disruption into innovation and convert short-term challenges into long-term value through flexible, data-driven, and regionally connected supply networks. 

Assumptions & Limitations 

This analysis is based on trade data, policy reviews and expert perspectives available as of July 2025. Tariff information comes from the White House Tariff Factsheets, the U.S. Harmonized Tariff Schedule, Section 232 and 301 measures and WTO-reported MFN duties. It assumes near-term global trade remains relatively stable, with businesses having some flexibility to adjust sourcing and processing strategies. ESG and reputational factors are important drivers in procurement decisions, and this blog assumes policy enforcement follows standard practice without retroactive or case-by-case exceptions. 

That said, the analysis does not account for company-specific cost structures, contractual terms or SKU-level customs classifications. The scenarios provided are illustrative and may not fully reflect the complexity of bilateral agreements or fast-changing local rules. Sudden economic shocks, logistics breakdowns or supply disruptions are not modeled in detail. ESG and geopolitical risks are partly based on qualitative judgments, which may vary by sector and geography. Readers should adapt these insights to their own situation and update mitigation strategies as conditions change. 

Authors: Devesh Sinha and Ninad Mirajgaonkar