Packaging Positive Thinking: Minnesota Printer Navigates a Trade War

By Doug Barry

Like many industries, the supply chains for businesses involved in printing and packaging are global. It’s no surprise that China plays a big role in both. 

Take wrapping paper and gift bags. Sourced from China? Yep. The United States and China are wrapped together in a dizzying array of SQ numbers, the extent of which has become clearer due to the ongoing trade war and battles over tariffs. One need only look at the labels on the clothes they wear or the country of origin markings on stuff ordered from Amazon to grasp the extent of the interdependence. 

Don Johnson is vice president of business development at Shapco Printing, a Minnesota printing firm, which has done manufacturing in Asia since 2005 and does some printing and bag-making in Shanghai. “I’ve had great experiences manufacturing goods in China with zero issues,” he said. “If you’re a customer in the United States, I can do anything for you–sourced from anywhere.”  

Johnson is a specialist in a highly specialized industry. He jokes that “it took 40 years of failure to make me successful.” He’s had his share of the latter, first with his family business for 18 years, then with corporate America, which includes servicing many large enterprise accounts. 

Johnson says his success in the packaging business is based on his ability to deliver big volume orders quickly. He works with Chinese partners on large quantity orders of half a million units and more. Recent supply chain snafus, especially the dearth of shipping containers, have stretched but not broken his track record. 

Tariffs take a toll 

Tariffs have also been a challenge. They created a volume drop as paper prices soared and triggered some layoffs in the United States. Shapco continues to manufacture in the United States, he said, noting that book printing is done here rather than China. 

Is he concerned that rising prices and trade tensions will eventually seriously crimp supplies from China? “Not at all. Asia will continue to be a center for low-cost manufacturing and China will play a role even if some of the labor is done in other countries in the region.” Child-resistant packaging is labor intensive and is unlikely to return to the US or other high labor cost countries.  

“I’m upbeat about our customers, and their customers, and understand that some goods are best produced in countries other than the United States.”

He expects demand to increase as COVID-19 uncertainty recedes. Tariffs continue to be a problem but those supply chains that can be rejiggered will help enable supply to meet demand.  

Like many business people we talked with in Minnesota, Johnson relies on a US-China ecosystem of organizations, many of them in existence for decades. He needs to keep a thumb on the pulse of what’s happening in the not-always-transparent world of supply chains and is grateful to others in the state willing to share their knowledge and insight. He’s a member and serves on the Board of Directors of the Minnesota-China Business Council and makes use of the expertise from the other members of the board. He worries about the status of these types of clubs. “I’ve seen a recent decline in these clubs,” he observed, “and I hope it does not reflect a souring of the public’s interest in China. I love to travel off-shore and I can’t wait to visit there again and touch base with my supply chain.” 

What about US-China trade policies, dual circulation, cybersecurity and other concerns of the moment? “I’m not the guy to ask that question to,” he replies crisply. 

“I’m upbeat about our customers, and their customers, and understand that some goods are best produced in countries other than the United States.” 

Johnson eagerly studies the market for signs of new trends. Looking ahead, he’s planning to attend the annual Cannabis Packaging Conference to share his insights and expand market share.