The Current - From toys to medical gloves: how the Iran war is hiking prices

Episode Date: May 6, 2026

Oil shock has been synonymous with the U.S.-Israeli war on Iran and the closure of the Strait of Hormuz, but the oil byproducts that make plastics aren't making it through the strait either, and as Beth Gardiner, author of the book, "Plastic Inc.: The Secret History and Shocking Future of Big Oil's Biggest Bet," explains it could start impacting the cost of goods here at home, from toys and clothes to the supply of medical gloves.

Okay, three songs. You guess who there by. Three little birds, one love, and jamming. Yeah, that was a really hard quiz. These are all, of course, by Bob Marley. A whole lot of the world felt close to Bob and his music before and after his passing. But the guy who really knew him best was his son, Ziggy. On Q, Ziggy Marley will tell you about his new record and about the song he says, connect him to his late father, Bob Marley.

You can hear that conversation now. Just search Q with Tom Power wherever you get your podcasts. This is a CBC podcast. Hello, I'm Matt Galloway, and this is the current podcast. These international waters belong to all nations, not to Iran, to tax, toll, or control. That's U.S. Defense Secretary Pete Hegzat speaking yesterday. It is a complicated situation in the Strait of Hormuz. Both Iran and the United States claim control over the crucial choke point.

Yesterday, just days after launching it, President Donald Trump paused the U.S. U.S. led effort to escort ships through, claiming what he called great progress in a possible peace deal. Axios is reporting this morning that the two sides are close to a one-page memorandum to end the war. But in the meantime, the tensions have created a huge spike in gas prices, shortages in jet fuel, and broader impacts on things like plastics. Because most plastics are made from oil or natural gas, they have become more expensive to produce. And that means the price of everyday goods like plastic jars, electronics, crayons, even clothing is going up.

Rob Schuyler is president of the Canadian toy developer Disco Nifty. Some of the plastic for their toys is produced in China. And here's what he says about how his business is being impacted. Factories from China are pushing back on any sort of cost reductions. So we're always trying to get the best price possible from factories. And right now, if you go back to a factory and say, hey, listen, this is a bit expensive. They say, that's the best we can do. We're expecting an increase in plastic cost.

We're expecting an increase in energy cost. We're expecting an increase in local shipping costs and trucking costs. So they're pushing back. They're definitely not willing to lower their prices. And in a lot of cases, they're starting to buffer and raise their prices. Guillaverdeer is CEO of Mediom Group, Inc. based in Quebec, they produce medical gloves and other protective gear. Guillaume, good morning. Good morning, Matt.

You run, as I said, a medical supply company. How has the closure of the Strait of Hormuz impacted what your company produces? So most of the products that we manufacture, face masks and gloves, are made of derivative of oil. And the reality is not the same between the type of products. What we've seen with the Strait of Hormuz is that the nitro glove, examination gloves, which are mainly produced today in Southeast Asia, are made of oil derivative, which comes from mainly the Middle East. So the Strait of Ormuz closure has created some sort of. scarcity in the base raw material associated with significant cost increase on this project.

So we've seen the cost of examination gloves go very, very high. When you say a significant cost increase, what are you talking about there? How much? So it's anywhere between 40 and 80%. Wow. So that's pretty significant. So what does that mean for 40 to 80 percent? Who eats that cost? So the cost is one issue. The other issue is the availability of raw material, which creates tensions on the supply chain. So if you're not an established manufacturer the way we are, you're risking not only to have cost increased, but product availability challenges on the market. So when you speak with the factories that manufacture your goods, what does? they tell you about what they can do on their end to mitigate those cost increases? Is there anything that they can do or are they just being hit because the cost of everything is going

up? So everybody is facing the same situation. The difference is when you are an integrated manufacturer, the way we are in Southeast Asia for some of our products, especially gloves, the closer you are to the origin supplier, the better, the relationship. and the long-term visibility is. So what we see is if you are an established supplier to where we are, for example, and you are close to the source, you're able to negotiate and secure access to products

or to raw material. But no business can absorb a 40 to 80% cost increase. So at what point in time are you going to have to start charging more to make up for those costs? So the whole market has started to revise pricing strategy and negotiate different deal with customers. This is not an industry which can absorb any type of price increase to that order of magnitude. And so you will have to charge more?

We have to charge more. This is one solution. There is another solution, which is a longer-term solution, which is to manufacture locally the products. So, for example, we're building a factory in Ontario to make examination gloves. This type of activity enables companies, countries, to have a better, more constant and on the long term, cheaper access to products than when we're only relying on impulse. The discussion we're having today on pricing is revealing that supply chain are interconnected. And the more steps they are in supply chain, the more.

difficult is to have visibility and to see the real pricing and costing. It feels like something out of COVID when we saw the disruption in, particularly PPE, personal protective equipment, and there was a big discussion about moving those supply chains back here. This feels very similar to that. So you're absolutely right, Matt. What we see with the crisis in the Middle East has a lot of similarity with COVID, with scarcity on material, pricing going up. and some governments and some companies, the way we've done,

have established manufacturing locally during COVID. So we manufacture fast masks in Quebec, for example. We haven't seen any cost increase or any material cost increase so far. Why? Because it's manufactured locally closer to raw material. We manufacture all material in Quebec. And local supply chain, we buy the raw material from North America and not from Middle East or Southeast Asia.

But in the meantime, creating a new supply chain here is a long-term project, as you said. If you have to raise those prices on those gloves, how are, for example, the hospitals that would purchase those gloves, how are they responding to that? So it's a case by case. There are some public tenders where there are some price adjustment mechanism based on index, publicly published indexes or all price.

and there are some contracts where it's a negotiation in a case-by-case. It depends who you believe, but the sense is that perhaps we are getting closer to the end of this phase of the war or the war entirely. But if this were to continue, is there the possibility that you could see the shortage of the gloves that you produce if the straight were remaining closed? If the crisis is ending tomorrow, going back to normal on the supply chain is anywhere between three and six months. And I'm not talking about cost. The longer it continues, the longer the lack of oil, of refined oil and raw material will impact the market. And yeah, we could have six to 12 months disruption in the market.

This is really interesting to hear about it. Again, we talk a lot about the price of gas and jet fuel and beyond, but it goes well beyond that as well. Guillaume, thank you very much for this and good luck. You're welcome. Thank you, Matt. Guillaume Laverdure is the CEO of Mediom Group, Inc. This week on two blocks from the White House, we're talking about a Supreme Court decision that could have a big impact on American elections. The decision narrows, some argue guts the Voting Rights Act of 1965, and it's expected to lead to a major redrawing of electoral maps.

Join me, Paul Hunter, and my fellow Washington correspondence, Katie Simpson and Willie Lowry as we break down U.S. politics from a Canadian perspective. Find and follow two blocks from the White House, wherever you get your podcasts. and watch us on YouTube. Beth Gardner is the author of Plastic Inc, the secret history and shocking future of big oil's biggest bet. She has written about the rising cost of plastics for the Atlantic magazine. Beth, good morning to you.

Hi. Thanks for having me. In the Atlantic, this is really interesting because you point out something obvious, which is that we see the price of gas going up because we won't go by the gas station and you see the numbers, but less visible is the increase in the basic materials

to create plastic. How much of a price increase is the plastic industry seeing right now? You know, they're seeing huge double-digit increases across the board, and also that generally means pretty healthy profits for the companies that are producing this stuff. I mean, right, like you say, you know, we're all very accustomed to the idea that when the price of oil goes up and you see that in the headlines, it's only going to be a day or a few days before you're going to see the price start to rise when you go to fill up your tank with gas or diesel. And certainly what we've seen as this conflict has played out and the straight has stayed closed for, you know, I think it's more than two months now. It's really been an object lesson in how vulnerable our dependence on fossil fuels as fuels makes us.

And yes, exactly as you said, plastics are sort of a little bit harder to see. The price rises and possibly shortages also take longer to work their way through the supply chains. It's not like, you know, the price of oil where it goes up and then you see it really quickly. This takes weeks or months because companies have stockpiles, they have inventories. And as those begin to sort of, you know, get worked through, these rises will inevitably and are beginning already, I think, to make their way through to the consumers. So to me, what it kind of shows us is that our dependence societally on plastics for so many different uses really make us vulnerable, too, in the same way that our dependence on oil and gases fuels have made us vulnerable to this kind of, you know, geopolitical

upheaval. I mean, as we're talking, I'm just looking around the studio that I'm sitting in, I'm surrounded by plastic right now, including the pen that I'm holding in my hands. What are the areas that are most vulnerable in this moment? Well, you know, I think exactly, as you said, right, everything around us, you know, the phone in your hand, the glasses on your face, the shoes on your feet, you know, fibers, synthetics that make our furniture, all these things are, you know, one or another type of plastic. But I think if you start to look at those items, what you'll realize is that some of them are a lot more essential than others, right? You'd be much more reluctant to go without the medical gloves, as your previous guest was talking about, that sounds pretty scary,

right? And it's reminiscent of some of the shortages that we saw during COVID times. But you might be kind of okay going without, you know, a whole handful of disposable utensils that are kind of chucked in the bag when you buy a takeaway and you don't even need them because you're taking it home and you have your own knives and forks, right? So I think a lot of different kinds of materials are going to be affected, but what you start to realize is that some of them are a lot more essential and others we could probably and should probably do without a lot more easily. We heard about toy companies, and you point this out in your piece as well in the Atlantic, that toy companies are particularly concerned. Why?

Yeah, well, I interviewed another toy manufacturer. He was based in Florida, but all of his producers, he's a toy company, but he doesn't actually do the manufacturing. He contracts with producers in China. He was just back from a trip there, and he said that their, you know, their supplies, their inputs, the plastic is rising in price by like 30, 40 percent. So what he told me is that his suppliers have quite a bit of inventory or they've locked in sort of with contracts, the price that they pay for plastic. So they're not feeling the increases yet, even though the raw plastics are going up in price. These companies have locked in their prices. So they're not passing anything onto him yet, but he's very worried. And what he told me is that toy companies tend to be

sort of, you know, when there are shortages, right? He said who gets the first supply is the company that can pay the most. Toy companies are, you know, it's a lower value kind of product, right, than a lot of other things. He's a fairly small company. So even within the toy industry, he's not necessarily going to be able to compete. So he's quite worried about what's coming. And he told me that he's at the same time having to now, with his own customers, lock in prices for spring of next year, spring 2027. Once he agrees on that price with the retailers, he can't increase the price that he charges.

He said this is exactly what happened to him last year with Trump's tariffs. He had already locked in his prices with the retailers. and then because of the tariffs on imports from China, his price went up and he had to eat the costs. And he told me he's really bracing for that to happen again because, you know, whatever the president is saying this morning, you know, I'm not sure there's really that much sign of things starting to move again through the straight of Hormuz. And as your previous guest, you know, already said, even when and if that straight does open, it's going to take months for the supply chains to untangle and things to really start moving again. and getting where they need to be. We just have a couple of minutes left. Given the fact that to your point, we are surrounded by plastics,

does something like this get people thinking in a meaningful way, but how to get us off of plastic? Yeah, I think maybe it does. You know, I mean, a lot of people have certainly asked me that question since I wrote this piece that was in the Atlantic. It reminds me a little bit of what I heard during COVID when we were having these lockdowns and people were like, oh, this is so great for the environment.

You know, at least there's no air, pollution in the middle of my city. And I was always sort of like, well, yeah, but this is not how you would choose to do that, right? Like, this certainly is a demonstration, like I said earlier, of how vulnerable, I think, are our dependence on what is absolutely a fossil fuel product makes us. This is not the way you would choose to, you know, try to reduce that dependence, right? It's very chaotic. Nobody wants to be running out of medical gloves and hospitals to be short of the kinds of supplies that they need. And there are people whose livelihoods rely on this, too. Exactly.

You know, so you would ideally, if you're thinking about reducing our dependence on plastic, you'd want to do that in a more structured way with smart policies that are thought through, put the costs on the right people, put them back on the companies that are actually making a fortune out of this. You know, Dow, for example, big producer of plastic in North America, they've been hiking their polyethylene price. You know, week after week, it's going up and up and up. their supplies are not that impacted because it's all being produced and sold in North America. It's not going through the straight of foremost. You know, when you're seeing companies like that profiting, well, they should actually be should

should actually be shouldering the burden if we're really talking about reducing our dependence on plastic. So, you know, your question is a good one, but this is certainly not the way we would choose to go about that. Beth, it's really good to talk to you about this. Again, there are hidden kind of parts to this story that maybe people aren't as a aware of yet, but they certainly will be, and I appreciate you shedding some light on that. Thank you very much. It's a pleasure. Thanks for having me. Beth Gardner is the author of Plastic Inc.,

the secret history and shocking future of Big Oil's biggest bet. She wrote about the possibility of, and we're already seeing that come to light, increases in plastics in the Atlantic magazine. You can find that online, or if you purchase the magazine in paper. You've been listening to the current podcast. My name is Matt Galloway. Thanks for listening. I'll talk to you soon. For more CBC podcasts, go to cbc.ca.ca slash podcasts.