Taiwan’s Paper Bag Industry Under the New US Tariff Regime

Competitive Resilience: Taiwan’s Paper Bag Industry Under the New US Tariff Regime

As of early 2026, the global trade landscape has undergone a significant transformation following the implementation of the U.S. reciprocal tariff policies. For Taiwan’s paper bag industry, the finalization of a 15% tariff rate—secured through the latest bilateral trade negotiations—marks a strategic turning point. While any increase in duties presents a challenge for traditional manufacturing, this 15% cap actually positions Taiwanese exporters with a distinct competitive edge over their primary regional rivals.

The "Sweet Spot" of 15%

The significance of the 15% rate lies in its exclusivity. Under the current U.S. "reciprocal" framework, Taiwan has successfully avoided the much higher 20% to 32% rates initially proposed. This places Taiwan on an equal footing with major economies like Japan, South Korea, and the EU. For the paper bag sector, which often operates on thin margins, this 5% to 10% tariff differential compared to other surplus nations is the margin between winning and losing a contract.

Advantage Over China and Southeast Asia

The most notable advantage appears when comparing Taiwan to its competitors in mainland China and Southeast Asia. Currently, Chinese paper products face a "stacking" effect of 301 tariffs and reciprocal duties that can exceed 40%. Meanwhile, major manufacturing hubs in Southeast Asia, such as Vietnam and Indonesia, are subject to reciprocal rates ranging between 19% and 20%.

By maintaining a lower 15% rate, Taiwanese paper bag manufacturers can offer more aggressive pricing to U.S. buyers. This cost advantage, combined with Taiwan’s reputation for stable supply chains and high-quality eco-friendly materials, makes "Made in Taiwan" (MIT) products the most attractive alternative for American retailers looking to diversify away from high-tariff regions.

Conclusion

While the 15% tariff is a new cost of doing business, it acts as a protective barrier against lower-cost competitors who are now burdened by even higher levies. For Taiwan’s paper bag industry, this era is not just about enduring tariffs, but about capturing the "order diversion" effect. By leveraging this tax advantage, Taiwanese firms are well-positioned to expand their market share in the United States.