In an ever-increasingly global economy, trade policies can have an outsized impact on companies like yours. Tariffs on materials such as wood and plastic can result in higher operating costs for warehousers, manufacturers, distributors, and other transportation-related businesses. Tariffs also can negatively impact supply chains, making them less reliable and more volatile.
For companies like yours which require pallets for daily operations, higher pallet tariffs are translating into higher costs because tariffs affect raw material costs and assembled pallet prices. According to data from Fastmarket, pallet prices increased by as much as $1 per pallet in a single, one-month period alone in early 2025. It’s clear that no matter the size and volume of your operations, the impact of pallet tariffs on your bottom line can be significant.
Read on to learn more about pallet tariffs and how trade policies affect pallet prices — and explore how you can reduce your pallet costs with strategic sourcing and digital pallet marketplace solutions.
The Current Tariff Landscape Affecting Pallet Prices
It’s important to first understand how the current tariff landscape is impacting pallet prices. Here, we break down key types of tariffs, recent tariff changes and announcements, and how tariffs are impacting the price of materials and goods from specific countries.
Key Tariff Categories
New tariffs on lumber imports are having an outsized impact on pallet prices. Historically, tariffs on softwood lumber imports from Canada have ranged from between eight and 20 percent. With new 2025 tariffs imposed on top of previously existing tariffs, this raises the effective tariff on lumber imports from Canada to between 35 and 40 percent.
Effective June of 2025, tariffs on imported steel and aluminum were increased to 50 percent. While imports from the United Kingdom remain at 25 percent, other country-level exceptions have been eliminated. After just one month of the tariffs being in place in early 2025, the cost for nails for pallets increased by five to 10 percent.
Pallets that are fully constructed in and imported from other countries also are subject to tariffs. Import tariffs vary based on the material and country of origin. In most cases, however, finished pallet tariffs purchased internationally are subject to a 10 percent baseline tariff. Additionally, plastic resin imports are subject to a 10 percent tariff, as well, which impacts plastic pallet manufacturing costs.
Other Policy Changes and Announcements
Recent changes to U.S. trade agreements with other countries also are affecting pallet prices. In 2020, the U.S.-Mexico-Canada Agreement (USMCA) replaced NAFTA, which has previously served as the trade agreement between the three countries since 1994. However, the USMCA will undergo a formal review in 2026 and changes are possible and expected. If the USMCA trade agreement changes significantly, pallet prices could be affected.
Country-of-Origin Impact Analysis
Newer tariffs are impacting goods imported from specific countries, as well. U.S. manufacturers importing lumber from Canada are dealing with substantially higher lumber tariffs and new border-crossing rules and regulations.
New tariffs of 55 percent on imports from China and other Asian countries have made Mexico a more attractive manufacturing hub for many manufacturers. Thanks to the USMCA, manufacturing in Mexico now comes with lower labor costs than Asia — and has the added advantage of being geographically closer to the United States.
Specialty pallet imports and niche raw material imports from Europe also are now subject to a 15 percent tariff, effective July 2025. The 50 per cent tariffs on steel and aluminum imported from Europe remain in place, as well.
Supply Chain and Cost Impact Analysis
As mentioned, the costs associated with pallet tariffs and their raw material tariffs are typically passed along to buyers. It’s important to keep in mind that there are other indirect costs that are associated with pallet tariffs, as well.
Direct Cost Implications
Imagine, for example, you’re buying from a pallet supplier who purchases raw materials (lumber, hardware, nails) and assembles pallets. That supplier is dealing with multiple tariffs and multiple types of raw materials and still needs to turn a profit. That means a 15 percent tariff on lumber could raise the cost of finished pallets by as much as 20 percent. Keep in mind that it may take three to six months for you to see an increase in prices after a supplier starts paying these new tariffs. Pallet tariffs and raw material tariffs also vary according to the port-of-entry and inland transportation costs.
Hidden Operational Costs
There are also hidden operational costs associated with pallet tariffs. You may experience additional supply chain delays due to new customs processing and documentation processes. Tariff volatility also impacts supplier relationships and may force you to look at other supplier options. Tariffs create inventory management challenges, as well, and may require you to renegotiate supplier contracts, which may involve unexpected legal and administrative expenses. Additionally, tariffs increase the costs of products themselves, such as truck and trailer parts and components, creating a downstream ripple effect that ultimately increases transportation costs.
Ripple Effects Across Operations
Pallet tariffs and raw material tariffs can put stress on your internal operations. High costs can impact shipping budgets and put pressure on you to optimize how and where you warehouse pallets. Tariffs may lead you to increase your customer pricing and may translate into needing additional cash flow to maintain your pallet inventory.
Geographic and Trade Route Considerations
Geography and trade routes can impact how much your business is affected by pallet tariffs, too. It’s vital to consider the pros and cons of different sourcing strategies to reduce your pallet-related expenses.
Cross-Border Logistics Strategy
With new rules and tariffs around lumber and finished pallet imports crossing the U.S.-Canadian border, you’ll want to work on making your cross-border operations as efficient as possible. Also, consider buying pallets that are manufactured close to your operations, such as pallets manufactured in Mexico. You’ll also want to choose the right custom locations for imports and ensure you meet all cross-border documentation requirements as part of your cost-reduction strategy.
Domestic vs. International Sourcing
It’s wise to also consider the advantages and disadvantages of domestic versus international pallet sourcing. We’re already seeing a shift toward domestic pallet manufacturing in the United States in order to reduce costs. Recycled pallets also may be a good option, as they may not be subject to the new tariffs. Ultimately, you’ll want to conduct a cost-benefit analysis or work with a company like PalletTrader to get help deciding what type and/or grade is best for your operations.
Strategic Approaches to Pallet Procurement
With the potential volatility of the cost of pallets, now is the time to take a strategic approach and partner with a company like PalletTrader that can help create a complete pallet procurement strategy. A pallet procurement strategy can help you reduce your pallet expenses and better navigate possible supply chain disruptions in the future.
Supplier Diversification Strategies
One of the best ways to reduce the impact of pallet tariffs on your business is to diversify your suppliers. Consider developing relationships with U.S.-based pallet manufacturers if you haven’t already. Another valuable strategy to reduce costs is to work with a pallet-trading network like PalletTrader’s. With our online marketplace, you can access a diverse supplier base for additional pricing options. It’s a good idea to look beyond wooden pallets, as well. Plastic, metal, or composite options may help you reduce your costs.
Procurement Timing Optimization
Another cost-saving strategy that’s popular is to create a pallet-buying calendar or schedule that allows you to buy ahead of anticipated tariff increases. You also may want to shift your inventory strategy to buying earlier than usual to avoid pallet tariffs. When it comes to supplier contracts, try to lock in long-term agreements before new tariffs are implemented. Finally, you may want to use market intelligence data to stay ahead of pallet tariffs and higher prices. Using market intelligence and working with pallet experts like the team at PalletTrader helps optimize the timing of procurement.
Alternative Sourcing Solutions
One way to reduce the impact of pallet tariffs is to purchase recycled, used pallets domestically. Remanufactured or refurbished pallets aren’t tariff-free, however, as some of the components used in remanufactured pallets are subject to tariffs. Renting pallets or joining a pallet pool shifts the burden of tariffs to service providers, which is why you might want to consider both of these options, as well.
Expert Insights and Industry Intelligence
To better understand the pallet market and with cost-reduction in mind, consider using expert insights and industry intelligence as a competitive advantage. Trade associations, market data and analytics, and technology-based solutions all can provide you with valuable information on trends, predictions, and possible market volatility on the horizon.
Trade Association Perspectives
Trade associations like the National Wooden Pallet & Container Association, International Wood Products Association, Western Pallet Association, and the Canadian Wood Pallet and Container Association conduct tariff impact studies that can help you understand pallet tariffs and the current market better. Logistics industry forecasts and governmental updates also can serve as valuable tools in your cost-cutting arsenal. In addition, forecasts and updates provide supply chain predictions and regulatory updates that can inform how you approach pallet buying and selling.
Market Data and Analytics
Market data and analytics also can help you understand what’s happening across pallet markets. Historical pallet tariff analyses offer price impact data from previous tariff cycles, while predictive modeling can help you forecast future costs. Data on regional price variations offer valuable insights into how tariffs affect different regions and geographic markets, which can inform your procurement strategy. Lastly, seasonal pattern analytics can guide you in the timing of pallet procurement so that you avoid certain tariffs and seasonally-high pricing.
Technology Solutions for Tariff Management
For additional pallet market insights and intelligence, be sure to leverage technology to your advantage. Real-time cost tracking technology allows you to monitor which suppliers offer tariff-inclusive pricing. Market intelligence platforms like PalletTrader’s provide price transparency and allow you to compare tariff-adjusted costs across multiple suppliers. Another technology-based tool to consider is predictive analytics, which uses artificial intelligence to optimize pallet procurement for cost efficiency.
Future Outlook and Policy Forecasting
While none of us can predict exactly what future trade policies or pallet tariffs will look like, there are steps you can take to prepare for the future. Monitoring political and economic trends, as well as creating a strategy of adaptation can help you anticipate and deal with pallet supply chain disruption and/or future additional tariffs.
Political and Economic Trends
There is no doubt that political changes affect trade policy, which is why keeping an eye on election outcomes and cycles is always recommended. Manufacturing indices and construction indices also can give us clues about what’s happening with the broader economy and how they might impact pallet pricing and demand. It’s also important to consider the U.S. government’s international relations, trade wars, and resolutions, as they can greatly impact pallet prices. New legislation coming out of Congress may impact import duties and trade agreements, which impact pallet supplies and prices, as well.
Industry Adaptation Strategies
In the face of unpredictable pallet markets and high pallet prices, expect to see some pallet manufacturers invest in domestic pallet production. These nearshoring trends can often reduce your costs as a buyer. The adoption of new technologies such as automation is likely to reduce domestic pallet manufacturing costs, as well. We also can expect that sustainability efforts will be integrated with pallet production and that new environmental policies could impact import and export decisions. Finally, you can expect players in the industry to develop long-term strategies to deal with tariff volatility and foster great resilience across supply chains.
Actionable Implementation Guide: A Brief Overview
Now that you understand the hows and whys of pallet pricing, you’re probably asking what you can do to better understand your pallet expenses and reduce costs. Check out these tips for getting a handle on your pallet strategy, reducing costs, and preparing for the future.
Immediate Action Items (30 Days)
Medium-Term Strategic Adjustments (90 Days)
Long-Term Strategic Planning (12 Months)
PalletTrader's Tariff Mitigation Solutions
With our expert knowledge and technology-based tools, we can help you navigate the murky waters of pallet tariffs, simplify and streamline pallet procurement, and reduce your spend.
PalletTrader’s Marketplace Advantages for Tariff Navigation
When you partner with PalletTrader+, you gain more than just access to suppliers. You gain a dedicated team that manages your entire pallet program. Our experts use market intelligence and a wide supplier network to strategically source both domestic and international pallets, helping minimize the impact of tariffs and fluctuating material costs. Through PalletTrader+, you receive full visibility into pricing, supplier locations, and material options such as wood, plastic, metal, and recycled pallets. All of this is supported by detailed reporting and quarterly business reviews. Instead of spending hours comparing quotes, our team delivers optimized, tariff-aware procurement strategies that keep your costs stable and your supply chain resilient.
Intelligence and Advisory Services
Our team of experts can provide you and your team with market updates and regular briefings on tariff changes and their impact. We also can provide strategic advice on procurement and tariff-optimal sourcing. When it comes to costs, our cost analysis tools can calculate true tariff-inclusive total costs so you know exactly what you’re paying. Additionally, PalletTrader provides supplier diversification support to help you identify and qualify new pallet suppliers.
To get access to a diverse group of pallet suppliers and reduce the impact of pallet tariffs on your bottom line, contact PalletTrader’s team of experts.