US tariff policies could reshape the global packaging industry, with potential impacts reaching into the tens of billions of dollars, according to a new white paper from Smithers.
The white paper, “Impact of Tariffs on Packaging”, projects that global packaging demand will reach $1.52 tn by 2030, but warns that growth could slow by up to 0.5% under pessimistic scenarios.
Global packaging demand is set to hit $1.52 tn by 2030, with growth rates of 3.8% in the Smithers baseline scenario; it may rise to 3.9% in the optimistic scenario or drop to 3.3% in the 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.
Key Findings include:
- Depending on the scenario, U.S. packaging consumption in 2030 could range from $255.4 bn to $279.6 bn, a swing of over $24 bn 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
- Despite economic pressures, healthcare packaging is forecast to grow at 3.1% CAGR in the U.S., while cosmetics packaging benefits from the ‘lipstick effect’, with consumers maintaining spending on small luxuries
- 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.
Smithers built three robust scenarios (baseline, pessimistic and optimistic) to assess the impact of tariffs on key packaging materials, end-use markets and geographies. Primary and secondary research was built on top of the Smithers in-house database to develop the data for each key scenario. Every step was assessed by the Smithers team of packaging subject matter experts. The core economic assumptions utilised IMF and USITC data.
To find out more about Impact of Tariffs on Packaging white paper, please contact Bill Allen
