US tariffs' impact on European folding carton industry calls for strategic action

Folding carton is a boxboard grade primarily used in food and consumer goods packaging. The US is a key strategic destination for European folding carton exports, especially following the loss of Russian exports due to sanctions. Over the past decade, European folding carton exports to the US have grown by roughly 35%, accounting for a quarter of Europe's total folding carton exports in 2024.

In recent years, structural disadvantages - stemming from decarbonization initiatives and investments in energy efficiency - have increasingly strained the cost-competitiveness of European folding carton producers. Simultaneously, elevated pulpwood prices and currency fluctuations have further weakened their position in the US market. The introduction of US import tariffs has compounded these challenges, particularly affecting Nordic producers who export virgin-based folding boxboard to the US. Their remaining cost advantage is being eroded, potentially resulting in some volumes staying in Europe. This shift is adding further pressure to an already depressed pricing environment, where persistent supply-demand imbalances continue to limit price recovery and squeeze margins for all producers.

Beyond these direct effects for exporters, the broader industry is feeling the strain. Tariff threats have eroded transatlantic business confidence, leaving the US export market outlook uncertain for European players. Tariffs have disrupted the anticipated recovery in European domestic demand, while capacity adjustments and site closures are becoming more frequent, and investment confidence is faltering. This is placing sustained downward pressure on the sector. Meanwhile, competitive pressure from Asian producers - especially China - is intensifying, adding to the challenges.

For European folding carton producers, this means rethinking strategies to operate effectively in a volatile and rapidly evolving environment - where flexibility, resilience, and strategic foresight are essential to navigating ongoing disruptions.