In 2018, the Trump administration levied a 10% tariff on folding cartons from China that was scheduled to increase to 25% on January 1, 2019; however, in December 2018, China and the U.S. agreed on a temporary suspension of tariff increases. If tariffs continue to rise as planned, they will result in increases in domestic production as well as a more rapid transition to flexible packaging formats. These and other trends are presented in Corrugated & Paperboard Boxes, a new study from The Freedonia Group.
The report predicts demand for folding paperboard boxes to grow 3.9% per year through 2022 to $12.8 billion.
Freedonia’s study notes that the U.S. maintains a trade deficit in folding paperboard boxes that accounted for about 5% of demand in 2017. By value, Canada supplies almost half of the folding cartons imported to the U.S. due to its geographic proximity and abundant forestry resources and processing facilities. China is the second-largest source of folding cartons—in both volume and value terms—because the country’s low manufacturing costs offset the cost of shipping these products.
The report forecasts demand for all types of corrugated and paperboard boxes (i.e., corrugated and solid fiber, folding paperboard and set-up paperboard) will increase 2.6% annually to $42.5 billion in 2022.
Here, Freedonia says nearly half of all new demand will stem from the food and beverage market, with 16% of new box sales coming from what it says is “the small but rapidly growing e-commerce segment.”
Published in January, 2019, the 212-page Corrugated & Paperboard Boxes report is available for $5,500 from The Freedonia Group.