U.S. 50% duties on specified Canadian pulp and paper products meet Canada's new tariffs of up to 50% on U.S. tissue, paper and dissolving pulp

U.S. and Canadian tariffs are adding another layer of uncertainty for the North American tissue and paper industry. The U.S. initially imposed 50% duties on selected Canadian pulp and paper products, while Canada responded with counter-tariffs of up to 50% on U.S. tissue, paper and dissolving pulp.

U.S. section 338 duties: 50% on specified Canadian pulp and paper products

The flashpoint for pulp and paper came after the U.S. imposed additional duties under Section 338 of the Tariff Act of 1930 on covered Canadian goods, with the measures taking effect Aug. 22. Among the affected products are:

●      Dissolving-grade chemical wood pulp.

●      "Toilet or facial tissue stock" and other specified household and sanitary paper products used by U.S. converters.

Canada hits back: tissue, paper and dissolving pulp in the crosshairs

Ottawa's counter-tariffs target a range of U.S. pulp, paper and converted-paper products. In the pulp and paper sector, the Sept. 8 Canadian schedule includes:

●      50% on HS 4702.00.00 – chemical wood pulp, dissolving grades, used to produce rayon, acetate and other cellulose derivatives.

●      50% on HS 4803.00.00 – toilet/facial tissue stock, towel/napkin stock and similar household or sanitary paper, including cellulose wadding and webs.

●      25% on finished toilet paper (HS 4818.10.00).

●      25% on facial tissues and hand towels (HS 4818.20.00).

●      50% on paper tablecloths and serviettes (HS 4818.30.00).

●      50% on other household and sanitary paper articles (HS 4818.90.00).

●      50% on a range of printing, writing and packaging grades, including certain coated graphic papers and boards, envelopes, corrugated boxes and paper sacks.

Kraft pulp is an exception

One important distinction in the Canadian tariff schedule is the kraft pulp. HS 4703, which covers chemical wood pulp produced by the soda or sulfate (kraft) process, is not included in Canada's Sept. 8 counter-tariff list. This includes bleached coniferous kraft pulp, such as NBSK, under HS 4703.21.00.

Dissolving-grade chemical wood pulp under HS 4702.00.00, however, is subject to Canada's 50% surtax. The distinction is important when assessing the potential impact of the new measures on pulp and tissue supply chains.

What's taxed, what's not: a quick reference for mills and converters

Industry reaction: uncertainty and delayed decisions

The tariff shock is also affecting corporate planning. Kruger Products, producer of Scotties facial tissue as well as Cashmere, White Swan and Purex toilet paper, has cited an uncertain economic environment, including tariffs and uncertainty around the Canada-U.S.-Mexico trade framework, as factors affecting investment decisions.

The broader concern for tissue manufacturers is the potential impact on tissue stock costs, pricing and margins. Because Canadian NBSK is not included in the Section 338 tariff, the immediate exposure for tissue manufacturers is concentrated further downstream, particularly in covered tissue stock and paper products. 

Competitive pressure could limit how much of the increase is passed through immediately, but prolonged tariffs could eventually put pressure on manufacturing costs, tissue prices and product economics.

By the numbers: U.S. toilet paper imports from Canada

●      2024: The U.S. imported about $328 million of finished toilet paper from Canada (HS 4818.10), according to UN Comtrade/World Bank data.

●      2025: Total U.S. toilet paper imports reached about $575.1 million (roughly 310,555 metric tons), with Canada accounting for about $383.4 million and 166,227 metric tons—roughly two thirds of import value and about half of import volume.

●      Share of U.S. market: Imports represent only about 5% of total U.S. toilet paper consumption (2024), with the vast majority produced domestically.

Canada is the largest foreign supplier of U.S. toilet paper, but the U.S. market is overwhelmingly supplied by domestic mills. For toilet paper, the immediate tariff risk is therefore more likely to be more about marginal cost and pricing power rather than a direct supply shortage.

What to watch next

Negotiations: Both sides remain under pressure to resume negotiations. Any agreement could quickly change which pulp, paper and tissue products remain subject to elevated duties.

Supply chains: U.S. tissue manufacturers and converters will be watching tissue-stock costs, finished-product pricing and cross-border trade flows as the tariff measures evolve.t.

Tissue pricing: The key question for converters and retailers will be how much of the additional cost is absorbed by manufacturers and how much ultimately reaches customers.

Market response: Tissue pricing, brand availability, mill utilization and cross-border trade flows will be important indicators of the longer-term impact.