US tariffs are changing the European paper packaging industry, and behind this are huge changes in the global economy!
author: Annie
2025-08-01
Market uncertainty is exacerbated by ambiguous information and potential misinterpretations. As trust in the US government declines, the global balance of power is shifting. The rapidly evolving situation and growing uncertainty make it challenging to accurately grasp the potential consequences of this crisis. While the impact of tariffs on consumers will vary by region and remains uncertain, it is certain that they will have a profound impact on the global economy.
This uncertainty is expected to weaken consumer confidence, leading to reduced purchasing activity. Furthermore, in some cases, shifts in consumer behavior may even lead to a boycott of brands from specific regions. Therefore, the indirect changes triggered by uncertainty could have a more severe impact on demand than direct tariffs. The impact of these events is expected to persist for a considerable period, even beyond the term of a single government. This presents an opportunity for Europe to strengthen its independence and play a more significant role in the global economy.
Therefore, recent demand changes in the European packaging paper market have shown both positive and negative impacts. However, the impact of growing uncertainty and tariffs has been more pronounced, prompting downward revisions to containerboard and paperboard demand and trade forecasts for this year and next. Because tariffs have historically been easy to circumvent, the decline in trade has been modest. Notably, the European manufacturing sector has recovered faster than expected, and increased defense spending may further stimulate economic recovery.
Trade wars and high tariffs could cause containerboard and paperboard production growth to decline again. This crisis, already beginning to unfold, could undermine globalization and usher in a new era emphasizing self-sufficiency. Data shows that net exports of virgin and recycled containerboard remained at historically high levels in January, increasing by over 20% year-on-year.
Western European market: corrugated boxes and containerboard
European manufacturing continues to recover, with output growing for the second consecutive month in April. This output increase was the fastest since March 2022 and exceeded market expectations, particularly following the imposition of 10% tariffs by the United States in early April. Furthermore, the decline in new orders was the smallest since April 2022. This suggests that the manufacturing sector is gradually stabilizing; however, the outlook remains uncertain due to uncertainty surrounding US tariff policy.
Growth in the industrial economy is reflected in increases in retail trade activity and the production of non-durable consumer goods. However, the consumption and production of durable consumer goods remain bleak. Continued economic uncertainty is expected to further reduce consumer willingness to purchase these durable goods. Western European corrugated board shipments are projected to rebound by 1 billion square meters in 2024 compared to 2023, a 2.6% increase.
The current recovery is modest, given the significant decline in corrugated board shipments in 2022 and 2023. Shipment growth slowed in the second half of 2024, and preliminary data suggest this deceleration will continue through early 2025. Shipments are projected to increase to 10.2 billion square meters, reflecting a 2.2% year-over-year increase in the first quarter of 2025. Political and economic uncertainty appears to have had little impact on corrugated board shipments so far. However, the situation has become more uncertain at the beginning of the second quarter, which is expected to further dampen growth in corrugated board shipments.
Western European containerboard demand follows a similar growth pattern to that of corrugated board. By 2024, containerboard demand will have increased by over 880,000 tons compared to 2023, a 3.8% increase. This growth is driven by an 8.6% increase in virgin containerboard demand of 345,000 tons and a 2.8% increase in recycled containerboard demand of 535,000 tons. Preliminary data indicates that containerboard demand will show moderate growth in the first quarter of 2025, increasing by 50,000 tons and a 0.8% increase compared to the same period in 2024.
Western European market: cardboard
The recovery of European manufacturing is expected to lead to faster-than-expected growth in cardboard demand in Western Europe in the first quarter of 2025. This recovery will be similar in pace to the first quarter of 2024. This growth in cardboard demand is driven by a general improvement in demand for retail and non-durable consumer goods. Food and beverages, as well as pharmaceuticals, are estimated to contribute most to the growth. However, ongoing economic uncertainty and tariffs are hindering consumption of durable goods and branded luxury goods, limiting the recovery in cardboard demand.
Despite this, the manufacturing sector continued to recover in April, supporting faster-than-expected growth in cardboard demand in the coming quarters. Western European cardboard demand is projected to increase by more than 515,000 tons in 2024 compared to 2023, a 10.6% increase. Preliminary data indicates that cardboard demand in the first quarter of 2025 will surge by 169,000 tons month-over-month, a 13.8% increase. However, year-over-year demand in the first quarter is projected to decline by nearly 10,000 tons, a 0.5% decrease.
Despite this, improved manufacturing conditions have led to an increase in the projected demand for cardboard by approximately 70,000 tons compared to the previous forecast. Net exports of cardboard from Western Europe will rebound rapidly in the first half of 2024, but will weaken significantly by the end of the year, even beginning to decline in exports to Asia, Africa, and the Middle East. Nevertheless, net exports for the full year 2024 will still increase by over 275,000 tons compared to 2023, a 9.6% increase.
Two major printing giants in the United States announced layoffs and factory closures respectively, and it is estimated that 250 people will lose their jobs!
12.9 billion! The US packaging giant with annual revenue of 60 billion won Grave's containerboard business!
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