How Trump's Tariffs Could Reshape the Pallet Industry in 2025

The New Tariff Landscape

As of April 2025, President Donald Trump's administration has enacted sweeping tariffs on imports into the United States — a baseline 10% on nearly all foreign goods and much higher rates on key trading partners such as China (54%), Vietnam (46%), and the European Union (20%). While much of the focus has been on cars, electronics, and consumer goods, the pallet industry is also deeply exposed to these changes.

Pallets are the unsung backbone of the global supply chain — and changes in import costs, raw material access, and equipment sourcing could have long-lasting consequences for pallet manufacturers, recyclers, buyers, and exporters.

1. Rising Material Costs for Wood and Plastic Pallets

Raw materials like hardwood and softwood lumber, plastic resins, nails, and steel fasteners are heavily impacted by tariffs, especially those sourced internationally.

Softwood lumber, a key component of standard 48x40 wood pallets, is often imported from Canada and parts of the EU — both of which are now subject to high or previously existing tariffs.
Plastic resins, used for manufacturing plastic pallets, are commonly sourced from Asia — including Thailand and Vietnam, now hit with 36% and 46% tariffs respectively.
Steel nails and metal fasteners, often imported from China, are now significantly more expensive due to the 54% tariff rate.

These cost increases are likely to be passed down the supply chain, making pallets more expensive for distributors and end users.

2. Tariffs on Imported Pallets and Finished Goods

Many pallet companies import finished pallets (especially plastic ones) from Asia and Europe. With the new tariffs in place, these products face higher import costs:

Plastic pallets from China, Vietnam, or Taiwan now come with an added 30–50% cost.
Heat-treated (HT) export pallets imported for international shipping compliance will also become pricier.

For large-scale operations that rely on steady imports of standardized pallets, this could disrupt procurement schedules and lead to sourcing bottlenecks.

3. Opportunities for Domestic Pallet Producers

While global sourcing becomes more expensive, U.S.-based pallet manufacturers and recyclers could benefit — at least in the short term.

With import costs rising, buyers may turn to domestic sources for:

New wood pallets
Recycled and remanufactured pallets
Heat-treated export-ready pallets

This could lead to a resurgence in domestic pallet production, particularly for companies that already operate within the U.S. and can provide regional fulfillment.

However, capacity limitations and raw material constraints could prevent smaller players from scaling up quickly enough to meet demand.

4. Exporters Hit Twice: Material and Logistics Costs

Companies that export goods from the U.S. now face double trouble:

Higher pallet costs, especially if they need ISPM-15 compliant heat-treated pallets.
Tariffs on their finished goods, making their exports less competitive globally.

Pallets used in exports are typically not returned, so the cost per unit rises significantly when pallets cost more upfront.

5. Potential Shifts in Pallet Recycling and Reuse

Rising costs may encourage greater adoption of recycled or remanufactured pallets, especially among price-sensitive industries like food, agriculture, and manufacturing.

This shift could:

Increase demand for used 48x40 GMA pallets
Encourage new businesses to enter the pallet recovery, sorting, and resale market
Put pressure on pallet recyclers to improve quality and sorting standards to remain competitive

6. Pressure on Equipment and Automation Imports

Many pallet yards and manufacturers use automated nailing machines, heat-treating chambers, and sortation lines sourced from Europe and Asia. These machines are now more expensive due to tariffs — especially from the EU (20%) and Japan (24%).

Delays in equipment upgrades could:

Reduce productivity
Extend lead times
Increase labor costs in the short term

7. Logistics and Freight Costs on the Rise

The 25% tariff on foreign-made automobiles, including trucks and logistics vehicles, could trickle down into the freight sector. This may drive up the cost of shipping pallets regionally or to ports for export.

Also, tighter margins on imported goods could reduce demand for transportation — affecting the volume of pallets needed for shipping.

Conclusion: A Crossroads for the U.S. Pallet Industry

Trump's 2025 tariff strategy is causing waves across the global supply chain — and the pallet industry is caught in the middle. While some U.S.-based manufacturers may benefit from reduced foreign competition, rising input costs and global uncertainty present serious challenges.

Now more than ever, pallet companies must focus on supply chain agility, local sourcing, and recycling innovation. Those that adapt quickly to the new trade landscape will be better positioned to grow — while those that depend heavily on imports may struggle to maintain profit margins.