Tariffs Raise Consumer Demand and Industrial Production Risks for Packaging Producers

On April 2, President Donald Trump announced a wide array of tariffs on all US imports. For packaging producers, we see heightened risks in packaging demand, driven by a potential slowdown in consumer spending and further softening of industrial production. While packaging companies have different degrees of exposure to tariffs, and many will be able to offset the direct impact by passing through cost increases, a slowdown in demand could have a significant impact on their near-term results. Given the uncertainty around the duration of new tariffs and potential industry or regional exclusions, we are maintaining our fair value estimates.