Trump's new Canada tariffs could flush savings, send toilet paper prices higher

Key Points:

• President Trump's new 50% tariffs on Canadian goods, effective last weekend, are expected to increase toilet-paper makers' fiber costs by up to 11%, potentially leading to higher consumer prices within two months.
• Canadian long fiber, which constitutes about 15% of the fiber used in bath tissue and a larger share in paper towels, will become more expensive, with paper towel costs projected to rise by 31%.
• Manufacturers may absorb some of the increased costs due to a competitive US market or switch to lower-quality domestic fiber from the southeastern US, which could affect product softness.
• The tariffs apply to Canadian toilet and facial tissue stock used by US converters, not finished toilet paper, impacting imports valued at around $140 million in 2023, while Canada has announced retaliatory tariffs on US goods starting September 8.
• The trade dispute adds to existing tensions involving autos, dairy, and liquor, with potential price increases for consumers on products like Charmin Ultra and Brawny paper towels if companies pass on the full cost.