Smithers forecasts effect of US tariffs on packaging

The industry intelligence service’s new white paper, ‘Impact of Tariffs on Packaging’, projects that global packaging demand will reach USD 1.52-trillion by 2030 but has warned that growth could slow by up to 0.5% under pessimistic scenarios.

The USD 1.52-trillion figure is based on growth rates of 3.8% in Smithers’ baseline scenario, assessing the impact of tariffs on key packaging materials, end-use markets, and geographies, but the organisation said it may rise to 3.9% in its optimistic scenario or drop to 3.3% in its pessimistic scenario.

Tariffs are expected to impact US economic growth more than the global market in the short term, but a recovery is expected in later years, it added.

Smithers stated: “Depending on the scenario, US packaging consumption in 2030 could range from USD 255.4-billion to USD 279.6-billion, a swing of over USD 24-billion driven by tariff-related uncertainty.

“Segments such as rigid plastics and flexible packaging, which are heavily reliant on imports, are expected to face the sharpest cost increases, although demand remains resilient due to their essential role in food and healthcare.”

It added: “Despite economic pressures, healthcare packaging is forecast to grow at 3.1% CAGR in the US, while cosmetics packaging benefits from the ‘lipstick effect’, with consumers maintaining spending on small luxuries.”

Smithers said brands and converters are increasingly adopting a ‘Plus One’ strategy, diversifying their sourcing beyond China to mitigate future trade risks, with Southeast Asia and Latin America emerging as key alternatives.

A separate Smithers white paper, ‘Impact of Tariffs on Printing’, meanwhile, has also found that more than 1,000 US printing companies could be lost due to tariff impact.

It said the US printing market could see an additional decline of 6.4% by 2030 as a result of tariffs, representing the closure of more than 1,000 companies.

Smithers said US printing consumption in 2030 could range from USD 78.6-billion to USD 84.7-billion, a swing of over USD 6-billion driven by tariff-related uncertainty.

The white paper has projected that global printing demand will reach USD 355.2-billion by 2030 but warned that growth could decline further by up to 3.1% in the pessimistic scenario.

Smithers stated: “Segments like commercial print and book printing face the steepest declines due to discretionary spending cuts and import reliance. Prices for US-manufactured paper and inks will be affected by imported raw materials, and there is not enough US capacity for printing papers, inks and plates in the short term. Export of used sheetfed offset hardware will be impacted as much of this is destined for India and China, where tariffs remain high. Printers and suppliers could be forced to explore reshoring and regional hubs to mitigate future tariff risks.”

(Source: PrintWeek.com)