Packaging machinery faces the challenge of tariffs

In collaboration with the MECS research centre, ItaliaImballaggio analysed export trends in the three countries at the epicentre of the trade war. A UCIMA survey captures the sentiment and countermeasures of leading manufacturers

Luca Baraldi and Generoso Verrusio

The fiercest trade war of the new century has erupted between the United States, Canada and Mexico. And from 2 April – the day reciprocal tariffs were officially announced with great fanfare in the White House Rose Garden by Donald Trump himself – this economic conflict has escalated rapidly, carrying with it far-reaching geopolitical implications.
The European Union will face tariffs of 20% because it was accused of maintaining trade barriers of 39%. Japan will be hit with 24% tariffs, South Korea 25%, India 26%, Vietnam 46%, Taiwan 32%, and the United Kingdom and Brazil 10%. China will face new tariffs of 34%, bringing its total to 54% when existing tariffs are included. Starting 5 April, a base tariff of 10% will apply to imports from all countries. For Canada and Mexico, tariffs of 25%, previously decided but temporarily suspended, will now come into effect, with exemptions for goods covered under the North American Free Trade Agreement (NAFTA).
In particular, tariffs on steel and aluminium, which have been among the most aggressively targeted by Donald Trump, are expected to cause quite a few headaches for the entire packaging machinery industry. In what many are calling a “perfect storm”, the industry fears it will be forced to make significant adjustments to its sourcing strategies and supply chains.
In collaboration with MECS, UCIMA's research centre specialising in data analysis on automatic packaging and wrapping machinery, ItaliaImballaggio examined the sector's export performance to the United States, Canada and Mexico, the three key target markets for the Italian packaging industry. Drawing on the latest data from ISTAT concerning Italian exports in 2024, we examined the main trends and the dynamics of growth or decline in these countries.

The U.S.: the leading market for all

Without too many surprises, in 2024, the United States remains the top export market for all major global packaging machinery manufacturers, including Germany, Italy, China, and also Switzerland, France, Japan and Spain.
Germany leads the way, with exports amounting to €1.3 billion in absolute value (a 20% increase over 2023). Italy follows, with nearly €1 billion (a 6.3% decline) and further behind is Canada, with exports totalling €679 million (an increase of 5.6%).
A closer look, however, clearly reveals the contrasting performance of the two main competitors, Germany and Italy. While German exports show solid growth at 20%, Italy sees a decline of 6.3%. However, this drop is offset and justified by the exceptional results achieved in 2023, when Italian packaging machinery manufacturers recorded an impressive 31.3% surge in exports.
In fact, when looking at the past 5 years - which provides a more reliable timeframe for qualitative analysis - Italy and Germany have recorded similar compound annual growth rates (CAGR), at +9.4% and +11.1% respectively. The only country outperforming both is China with a CAGR of +15.6%.

In Canada, Italy earns the most

Let's turn our attention northward to the Canadian market. From 2019 to 2023, total exports from the world's leading packaging machinery manufacturers grew steadily, rising from €672 million to approximately €850 million. However, in 2024, the trend reversed, with total trade flows decreasing by 6.9% (€791,581 million).
Canada, in absolute terms, is a less significant market for Italy compared to the United States. However, it is interesting to see how the trend seen in the U.S. is completely reversed in Canada: Germany experienced a sharp decline of 20.5%, while Italy recorded a modest increase of 2.9%.
At the top of the ranking is the United States, with a turnover of €405 million, followed by Germany and Italy, tied at €106 million. Further behind is China, with turnover nearing €39 million, followed by France and the Netherlands at €25 million and €22 million, respectively.

In Mexico, Italy overtakes the U.S.

The Mexican market experienced strong growth across the board between 2019 and 2024, with the total value of exports rising from €562,738 million in 2019 to over €1 billion in 2024.
Both Italy and Germany have seen substantial growth in Mexico. Germany led the way in growth in 2024, with exports reaching €269 million – an increase of 41.7%. However, for the first time, Italy became Mexico's top trading partner, overtaking the United States after years of close competition. In 2024, Italian exports reached €308 million compared to €258 million from the U.S.
China and Spain also recorded significant growth trends. With export values of €68 million and €65 million respectively, the two countries recorded increases of 13.6% and 40.4% compared to 2023.

The MECS-UCIMA Survey

To conclude its analysis, MECS, in collaboration with UCIMA (the Confindustria-affiliated association representing leading manufacturers of packaging machinery and technology), carried out a survey to gauge companies' expectations regarding the impact of U.S. tariffs.
The results - still partial and based on a representative sample of around 100 companies, which is likely to be expanded - indicate that, aside from some slowdowns in orders, no major setbacks have been reported so far.
However, sentiment shifts when looking at the long-term outlook. A total of 32.6% of respondents anticipate greater difficulty accessing the U.S. market, while 23.6% foresee a significant decline in exports to this market.
When asked the bluntest and most unappealing question, “What actions do you plan to take to counter the impact of tariffs?” respondents did not shy away, offering a range of insightful and interesting responses.
Of the companies surveyed, 32.6% plan to seek new markets outside the United States, 25.8% intend to absorb part of the additional costs in order to maintain competitive pricing, and another 25.8% are considering opening or expanding a production facility in the U.S. Meanwhile, 20.2% aim to renegotiate contracts with their U.S. customers and 6.7% plan to increase production in facilities located outside Europe.
It is still too early to predict the full impact of this trade war in the long term. What is certain, however, is that from a strategic standpoint, packaging companies are positioning themselves to face global uncertainties with preparedness and resilience.