Packaging giant Smurfit Westrock says Mexico tariffs would squeeze US consumer spending

Smurfit WestRock

12/02/2025 15:21

By Padraic Halpin
       DUBLIN, Feb 12 (Reuters) - The world's largest cardboard
box maker Smurfit Westrock  SW.N  expects U.S. consumer spending
to be squeezed significantly if  25% tariffs on Mexican goods go
ahead, its CEO said on Wednesday after the company's shares
dropped on disappointing fourth quarter earnings.
    U.S. President Donald Trump this month suspended a 25%
tariff on goods from Canada and Mexico until March. Smurfit
Westrock has large production facilities in all three countries
following last year's $11 billion merger between Europe-focused
Smurfit Kappa and U.S. rival WestRock.
    While Smurfit Westrock largely sells to customers within
each of the 40 countries it operates in, it said many of its
Mexican customers use its packaging to sell food such as fruit
and vegetables into the United States.
    "There will be, I would say, a very significant customer
effect," Smurfit Westrock chief executive Tony Smurfit said on 
a call with analysts regarding the potential tariffs on Mexican
goods.
    "Tariffs are on the consumer so at the end of the day is the
consumer going to pay 25% more for their avocados and their
oranges...or whatever they buy? We'll have to wait and see
because that'll be up to the American consumer and how that
affects demand."
    He added that Smurfit Westrock would have to "take a good
look" at its large mill in Canada that exports paper to the U.S.
if a 25% tariff is applied as it would very quickly become
uncompetitive.
    Smurfit reported full-year core profit of $4.7 billion and
while that was in line with its expectations, earnings before
interest, taxes, depreciation and amortisation of $1.166 billion
in the final three months of 2024 were below the $1.258 billion
expected by an average of 6 analysts with LSEG SmartEstimate.
    Its main U.S. listed shares were 5.6% lower at 1510 GMT.   
    The Irish-headquartered company said it expects to make a
core profit of $1.25 billion in the first quarter and that the
year has "started well"."

 (Reporting by Padraic Halpin; Editing by Kirsten Donovan)
 ((padraic.halpin@thomsonreuters.com; +353 1 500 1504; Reuters
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