Like the rest of the business world, packaging companies and their customers are eagerly awaiting what President-elect Donald Trump will do when he takes office, as it is likely to have an impact on trading and investment decisions in the coming year. At the same time, states are ready to exert their influence through new policy and legal efforts. In addition, 2025 May also provide more clarity on how companies view their public-facing sustainability strategies and the development of methods to reduce plastic emissions in the coming years.
With the new administration in office, tariffs and potential changes are imminent
Trump is expected to push for economic and regulatory changes that will have an impact on the packaging industry. While tariffs are not a new element of US policy - in some cases they have already affected certain types of packaging - the president-elect's proposed strategy could have a broader economic impact.
Analysts at firms like RaboResearch have said that universal benchmark tariffs, or country-specific tariffs, could affect overall U.S. inflation. "Resource Recycling" recently reported that tariffs may have an indirect impact on waste paper, which in turn affects the box board paper. At the same time, Bank of America Research pointed out that tariffs may boost the development of industries such as the domestic glass market in the United States. Industries such as flexible packaging are concerned about the impact tariffs could have on aluminum and related inputs.
Industry groups are watching closely, too, and expect changes in other areas. Multiple trade groups, including some representing packaging manufacturers, signed on to a December letter from the National Association of Manufacturers asking Trump to review policies related to PFAS, facility emissions, labor, the global Plastics Treaty and more.
One agency worth focusing on is the U.S. Environmental Protection Agency. While the EPA tends to be more advisory in some of its actions related to packaging and recycling, it does have the authority to regulate emissions and chemicals, which will directly affect manufacturers. Observers are bracing for what could be sweeping changes in the agency's personnel and priorities in the coming months. Meanwhile, observers expect new leaders overseeing the FDA with a focus on "Making America Healthy Again" could enact change initiatives in areas such as food additives.
Packaging policy negotiations are maturing
By now, plastics and packaging are the subject of state sustainability bills, a phenomenon that has long been commonplace for the industry. 2025 is expected to show how different stakeholders have learned from the obstacles and compromises reached in past legislative sessions. They are also learning as states move to implement extended producer responsibility (EPR), recycled materials policies, or other emerging regulatory initiatives.
This is all taking place against the backdrop of a changing political landscape and ongoing discussions around future opportunities for federal coordination. The year 2025 will be a landmark year for the EPR, with Oregon becoming the first pilot state in the United States to officially launch the EPR program. Much attention is also being paid to how the New York, Tennessee and other state legislatures move forward with EPR bills. Metal packaging advocates are again looking to states such as Washington and Illinois to enact EPR policies in conjunction with recycling and refund legislation or deposit return systems.
The development trend of labeling policy is also increasingly attracting attention. The Biden administration is coming to an end, yet the Federal Trade Commission is silent on the latest update to its green guidelines after years of review - guidelines that affect what sustainability claims or disposal symbols can be printed on packaging. Groups are also working to craft future bill proposals for Congress aimed at addressing what is often seen as a patchwork of state labeling rules.
With these national interests in mind, the packaging industry is seeking to expand its voice at the federal level. The Flexible Packaging Association, for example, formed a political action committee last year and is expected to begin screening candidates to support, with a focus on congressional races. Other regulatory changes to watch in North America include the creation of a federal Plastics registry in Canada to track information such as the amount of plastic on the market and the results of disposal. The first phase of the reporting requirements will open in September.
This year, companies also need to prepare for the EU's upcoming Packaging and Packaging Waste Regulation. The regulation will most likely take effect in 2026, after completing some final steps. Its requirements and targets for 2030 relate to waste reduction, minimum recycling, lightweight and reuse.
Industry consolidation in North America and increased international participation
Before the end of 2024, the packaging industry continues to see large-scale mergers and acquisitions announcements. Going into the beginning of 2025, according to analysts, M&A activity has picked up after a relatively modest period and shows no signs of slowing down. At the same time, the influence of international companies on the North American market is expected to grow further.
In 2024, paper packaging groups initially dominated large deal discussions, but by the end of the year, plastic packaging producers began to emerge. Several large deals are expected to be completed in 2025, including International Paper's acquisition of Desma and Novolex's acquisition of Pactiv Evergreen.
Brazil-based Shuzano attempted to buy International Paper in early 2024, but was ultimately unsuccessful. However, in the fourth quarter, Suzanuno successfully entered the U.S. market by acquiring two Pactiv Evergreen plants. In addition, after repeatedly expressing a strong desire to expand in North America, Shuzanyuno is rumored to be considering making an offer to Washington-based Clearwater Paper.
In this regard, some analysts have expressed concern that further industry consolidation could harm the competitive posture of certain packaging industries. And the dynamics of M&A activity are potentially changing in anticipation of the Trump administration's possible loosening of antitrust regulations.
Changes in federal incentives may affect facility placement decisions
In the New Year, companies' decisions about opening, closing or investing in facilities are likely to be shaped in part by industry consolidation and new leadership in Washington, D.C.
Some company executives worry that infrastructure funds provided by the Biden administration, such as those used to purchase energy-efficient or low-carbon manufacturing equipment, will dry up. However, others believe that the expected tax breaks or incentives that the Trump administration may introduce may drive companies to make decisions on equipment purchases and facility expansion.
For example, Trump has proposed a series of policy ideas to boost manufacturing, including expanding the research and development tax credit and lowering the corporate tax rate for companies that produce goods domestically. On the other hand, he has vowed to repeal the Inflation Reduction Act. The Act has provided funding support for projects in energy-intensive industries, such as International Paper, O-I Glass and other companies have benefited from the act to decarbonize and reduce emissions equipment upgrades.
Analysts say the rebound in demand and the prospects for growth to boost investment vary by sector. Taking the box board industry as an example, in the past few years, a large number of box board mills have been put into production, but in the weak demand situation, the capacity has been rapidly reduced by half. Analysts at Wells Fargo Corporate & Investment Bank said U.S. manufacturers could cut as much as 2.5 million tons of cardboard capacity from their facility layouts over the next five years.
Similar to the M&A trend, investments by international companies in their North American operations are also in focus. In October 2024, Greek-based Flexopack revealed its intention to build its first U.S. flexible packaging plant in Pennsylvania. In November 2024, Netherlands-based Nelipak announced that it had opened its first North American flexible packaging manufacturing site in North Carolina. Entering January 2025, Nigeria-based The Paper Packaging Co. It also disclosed its plans to start operations in the United States by early 2025.
Will 2030 be the new 2025 of plastic reduction targets?
It's 2025, and yet the world's largest brands are not all shifting to more circular packaging, as many organizational goals set out. The changing social and political environment presents a potential turning point, or an opportunity, to redouble efforts to achieve a possible redesigned packaging sustainability strategy to meet future expectations.
Some large companies have publicly acknowledged this reality. Unilever has published an updated list of targets that will correspond to different points in time over the next decade. For organizations that voluntarily adhere to the US Plastics Convention, the roadmap for reducing the use of virgin plastics and increasing the use of recycled and recycled materials was updated last year, and the relevant targets were pushed back from 2025 to 2030.
Over the course of this year and next, companies can share more lessons learned before 2025, as well as new ways to achieve their next-generation goals. This may lead to smarter, more personalized goals for the future. Globally, while an internationally binding agreement to prevent plastic pollution is due to be reached in 2024, negotiations are expected to continue in 2025 - this time with US representation under a Republican administration.
It remains to be seen how regulatory and political trends away from environmental, social, and corporate governance (ESG) ideals will affect the pressures and aspirations for sustainable development. The phenomenon of "green propaganda" could become a problem. Still, many companies point out that consumer demand underpins these sustainability efforts anyway.
Local and state governments and environmental advocates have tried to use the judicial system to force change, but some high-profile cases have been stymied. The New York attorney general's lawsuit against Pepsi over plastic pollution, for example, was dismissed in November. The California attorney general is fighting ExxonMobil in court: The California attorney general sued the company last year, alleging restrictions on mechanical and chemical recycling; And this week, the company filed a lawsuit accusing the California attorney general of defamation.
