The trickle-down impact of Trump’s tariffs, coupled with weak demand for pulp in Europe and China, is squeezing some of the world’s largest forest companies. It comes as Metsä Group today warned that these factors have had a “clearly negative” impact on its financial performance, projecting that the group will lose EUR 35 million for the quarter (down from a EUR 81 million surplus in the January to March quarter).
“The negative comparable operating result was caused particularly by the weak demand for market pulp in Europe and China,” Metsä Group said. ” The uncertainty caused by US import duties has hurt the purchasing behaviour of paperboard customers in particular. Therefore, the Group company Metsä Board had to adjust its paperboard production more strongly than previously planned.”
It comes as Donald Trump today cranked up the pressure on America’s trading partners, firing off letters to the heads of 14 countries, informing them of their new tariff rate. However, at the same time, Trump took some of the edge off by signing an executive action to extend the date for all “reciprocal” tariffs, except those on China, to August 1.
In the letters addressed to Japan, South Korea, Malaysia, Kazakhstan, South Africa, Myanmar, Laos, Tunisia, Bosnia and Herzegovina, Indonesia, Bangladesh, Serbia, Cambodia and Thailand Trump said he takes particular issue with the trade deficits the United States runs with them, meaning America buys more goods from there compared to the amount that American businesses export to those countries. Trump also said the tariffs would be set in response to other policies that he deems impede the sale of American goods abroad.
Earlier this year, Wood Central reported that up to $1 billion worth of US forest products could be tied up in customs duties after the European Union proposed a new plan – since delayed – to hit Soya beans, poultry, rice, sweetcorn, fruit and nuts, wood, motorcycles, plastics, textiles, paintings, electrical equipment, makeup, and other beauty products.
