Budget for a stacked rate, not a single number. China-origin packaging now carries its normal duty, any existing Section 301 rate for its product classification, and a new 12.5% Section 301 duty added in July 2026. For most brands, the better first move is reducing landed cost through structure and shipping, because alternative countries face their own tariffs.
Moving production can still make sense for high-volume, stable SKUs, but a new supplier means new tooling, samples, and qualification time, and several alternative countries are under a pending Section 301 investigation. Confirm your products’ classification and current rates with your customs broker before changing plans.
Last updated: September 2026. US tariff rules are still changing, and several measures described here are being challenged in court. We update this article when the rules change.
If you buy custom packaging from China for the US market, the tariff picture has changed several times since 2024, and most of the predictions made back then no longer apply. This article covers what is in effect now, why “just move production” is a harder call than it looks, and what you can control in the meantime. INNORHINO produces mainly in China and works with partner factories in other regions, so these questions come up in almost every US project we handle.
What Tariffs changed between 2024 and 2026
The broad “reciprocal” tariffs introduced in 2025 were based on the International Emergency Economic Powers Act (IEEPA). On February 20, 2026, the Supreme Court ruled that IEEPA does not authorize tariffs, and those duties ended. The administration replaced them within hours with a temporary 10% global surcharge under Section 122 of the Trade Act of 1974, which expired on July 24, 2026.
At the moment Section 122 expired, new Section 301 tariffs took effect on products from 60 economies, based on a finding that those governments do not adequately enforce bans on goods made with forced labor. Products of China pay 12.5% under this measure, and it is added on top of the tariffs China-origin goods already pay. Those include the Section 301 tariffs on China that date back to 2018, with rates that vary by product list. Twenty-five states have filed suit to block the new Section 301 tariffs, but duties are being collected while the case proceeds.
If you imported packaging in 2025 and paid IEEPA duties, ask your customs broker whether you are eligible for a refund. The refund process depends on how and when the entries were filed.
Why moving production is not a simple fix to avoid tariffs
In 2024, the common advice was to shift sourcing to Southeast Asia or other “tariff-neutral” regions. That advice is weaker now. The new forced-labor tariffs cover 60 economies at 10% to 12.5%, and a separate Section 301 investigation into excess manufacturing capacity covers China, Vietnam, Thailand, Malaysia, Indonesia, Taiwan, and several others. That investigation has not yet produced tariffs, but it means the rate gap between China and many alternatives could narrow further.
Switching suppliers also has costs that don’t show up in a duty comparison: new dies and tooling, new pre-production samples, color matching against your existing packaging, a qualification period, and often longer lead times while the new supplier learns your specs. Country of origin is also determined by where the product is substantially made, not by where it ships from, so moving only the last step of production may not change the duty at all.
None of this means you should never move. It means the decision should come from a landed cost comparison for your actual SKUs, not from a headline tariff rate.
Work out what tariffs actually cost you
Tariffs are charged on the customs value of the packaging you import, not on the retail price of the product that goes inside it. For many brands, packaging is a small share of total product cost, so even a significant duty increase may move the final margin less than expected. For others, especially brands with premium rigid boxes or low-priced products, it matters a lot. The only way to know is to calculate it.
A useful landed cost comparison per SKU includes the unit price, freight per unit, the full stacked duty rate for that product’s classification, broker and port fees, and the cost of holding inventory between shipments. Ask your customs broker to confirm the classification and every duty layer that applies. Then express the result as a share of your product’s cost or retail price, which tells you how much effort the problem deserves.
Reduce landed cost without changing countries
Because duty is a percentage of value, and freight is often charged by volume, the packaging structure itself is one of the biggest levers you control. The most common ones:
- Ship flat where you can. Set-up rigid boxes ship mostly air. Collapsible rigid boxes or folding cartons can fit many more units per container, which lowers freight per unit. The trade-off is assembly time at your end or a slightly different unboxing feel.
- Remove components that don’t earn their cost. Extra inserts, wraps, or decorative layers add both value (and therefore duty) and volume. Review each one against what it does for protection or presentation.
- Share specifications across SKUs. Using the same box size or insert across several products increases order volume per item, which usually lowers unit price and simplifies inventory.
- Revisit order size and timing. Fewer, larger shipments lower freight and fixed fees per unit but tie up cash and storage. Find the balance for your sales volume rather than defaulting to the same order size every time.
These changes also keep paying off if tariffs fall later, which a country switch made purely for tariff reasons may not.
When it makes sense to stay, split, or move
| Option | Fits when | Main trade-off |
|---|---|---|
| Stay with current production | Packaging is a small share of product cost, specs change often, or you rely on complex finishes and structures your supplier already does well | You carry the full tariff stack; savings must come from structure and shipping |
| Split production | A few high-volume, stable SKUs could be produced elsewhere, while complex or frequently changing items stay put | Two supply chains to manage; color and quality consistency across sources needs checking |
| Move production | Landed cost comparison shows a clear, lasting gap for your main SKUs, and you have time to qualify a new source | Tooling, sampling, and qualification costs up front; the gap may shrink if new tariffs follow |
Whatever you choose, get quotes and samples before committing, and compare them on landed cost for the same specification, not on unit price alone.
What to watch next
Two things could change the numbers again: the outcome of the excess-capacity Section 301 investigation, which could add tariffs on China and several alternative sourcing countries, and the court challenge to the forced-labor Section 301 tariffs. If you are planning orders for the next six to twelve months, build in a buffer for rate changes and check current rates with your broker before each shipment.
Want to compare landed cost for your packaging?
If you’re reviewing packaging costs under the current tariffs, send us your current packaging specs or samples, annual volumes per SKU, and how your packaging ships today. We can review the structure and shipping configuration for savings and, where a partner facility suits the product, quote it alongside China production so you can compare on the same specification. For duty rates and classification, we recommend confirming with your customs broker.
