Choppy Waters Ahead: Navigating Tariffs, Tight Supply and Legislative Uncertainty
As 2025 winds down, Millcraft President Greg Lovensheimer summed up the current market in two words that feel all too accurate: “Choppy Waters.”
During the Millcraft State of the Graphic Paper Industry Q4 2025 webinar, almost 300 registered attendees joined Greg for a timely discussion on the external forces shaping today’s graphic paper landscape—from shifting tariffs and tightening supply to new postal programs and legislation poised to impact print’s future.
Greg reminded attendees that his role is not to predict panic but to provide perspective. “Everything points to growth,” he noted, “but uncertainty still lingers. End users are cautious, and we’re not firing on all cylinders yet. The question is, what will be the next catalyst for calm seas—or bigger waves?”
Reading the Currents
Reflecting on Q3, Greg acknowledged that many of the year’s trends have held steady: stability in some areas, tension in others. Millcraft’s in-house AI analysis of attendee feedback revealed cautious optimism across the supply chain. While tariffs, inflation, and customer hesitation remain challenges, most printers and distributors anticipate steady or improved performance heading into 2026.
This balance of restraint and resilience, Greg explained, signals transition rather than stagnation. Diversification in packaging, wide-format, and promotional products continues to create opportunity, while gradual manufacturing recovery and stable freight costs suggest a foundation for growth in the year ahead.
Printers echoed similar sentiments, describing the year as one of “mixed results” and measured confidence. Some cited steady gains in packaging and specialty print, while others reported softness in traditional commercial segments. “It’s not that print is disappearing,” Greg said, “it’s that customers are being more deliberate. They’re investing in the print that matters.”
Tariffs and Trade Tides
Few topics generated more discussion than tariffs. 2025 saw rapid adjustments across global supply lines, including significant increases affecting key import partners. Brazil’s 50 percent tariff on uncoated freesheet—about a tenth of the U.S. uncoated freesheet market—stands out as particularly disruptive. Within just months, rates for the European Union and South Korea rose to 15 percent, while India matched Brazil at 50 percent.
“These are meaningful changes,” Greg explained. “You can’t squeeze out 50 percent cost. These shifts are forcing both suppliers and customers to rethink where they source and how they plan.”
Yet amid volatility abroad, the U.S. economy continued to show surprising strength. Real GDP grew by 3.8 percent—outpacing expectations—and consumer spending remained the primary driver, accounting for roughly 68 percent of overall growth. The Federal Reserve’s recent series of rate cuts has lowered borrowing costs to a range of 3.75 to 4 percent, giving businesses the flexibility to reinvest in equipment, technology, and marketing.
Greg noted that these economic tailwinds could help revive print demand. “Every time borrowing costs come down,” he said, “capital projects move off the sidelines. That ripple effect always finds its way to print—whether in packaging, manuals, or marketing materials.”
Still, uncertainty remains. Ongoing geopolitical tension, trade disputes, and a delayed release of third-quarter federal data due to the government shutdown leave open questions about what’s next. Inflation is hovering around 3 percent, but Greg described the outlook as “turbulent, yet trending positive” heading into 2026.
Freight, Manufacturing and Market Dynamics
Beyond macroeconomics, Greg emphasized that supply chains and freight continue to play a pivotal role in shaping the market. Domestic trucking rates have stabilized at roughly $2.10 per mile, and diesel fuel has held steady around $3.72 per gallon—both signals of a balanced logistics environment after years of volatility.
Ocean freight is also beginning to normalize. Recent trade discussions between the U.S. and China led to the suspension of additional port fees on Chinese-built vessels, offering modest relief to global shippers. “This is about as stable a freight market as you want to see,” Greg said. “Stability means predictability—and that’s what helps our industry plan ahead.”
Manufacturing, meanwhile, continues to hover near neutral. The Purchasing Managers Index sits just below 50, reflecting contraction in some sectors but renewed optimism in others. Customer inventories remain historically low, suggesting a possible rebound in production once confidence returns.
Postal Progress and Industry Engagement
Greg also underscored the importance of staying engaged with the U.S. Postal Service, a system that touches nearly 40 percent of the graphic paper industry. He encouraged attendees to connect with their local Postal Customer Councils and take advantage of new USPS promotions—particularly the Catalog Insights Promotion, which offers a historic 10 percent discount for catalog mailers.
More than a cost break, the initiative represents a new era of collaboration between print and the Postal Service. The promotion serves as a test case to better understand how pricing incentives influence mail volume and engagement. “The Postal Service is listening,” Greg noted. “They want to partner with the industry to drive results. This is a positive step.”
He contrasted the USPS’s approach with Canada Post’s recent decision to phase out door-to-door delivery—an example of what can happen when advocacy wanes. Greg urged attendees to see the USPS not as an obstacle but as an ally. “If we want to preserve mail as a vital marketing channel,” he said, “we have to show up and engage.”
Legislative Watch: Protecting Print’s Voice
A significant portion of Greg’s presentation focused on policy—specifically, House Resolution 2441 and Senate Bill 1877, collectively titled the Improving Disclosure for Investors Act of 2025.
At face value, the bill sounds positive. In practice, it could have serious implications for the print industry by making electronic delivery the default for investor communications, forcing consumers to opt back in to paper—through electronic means.
“This could significantly reduce effective disclosure,” Greg warned. “It overlooks older investors and rural Americans who lack broadband access. We can’t let something like this quietly slip through.”
He encouraged all attendees to act and contact their representatives through https://votervoice.net/iframes/PTUL/Campaigns/119902/Respond, urging them to vote no on the measure. “This isn’t about politics,” he added. “It’s about protecting an industry that millions rely on for clear, accessible information.”
Preparing for What Comes Next
While external pressures—from tariffs and freight to legislation—will continue to shape 2026, Greg closed on a message of preparation and partnership. Supply remains tight across several paper grades, and global conditions point to ongoing challenges in balancing capacity and demand.
Yet, as Greg reminded the audience, partnership is the true differentiator. “The industry is like a game of musical chairs,” he said. “There used to be a thousand chairs—now there are less than a dozen. Partnerships matter more than ever.”
He encouraged printers, converters, and distributors to collaborate closely with their suppliers, conduct annual business reviews, and communicate forecasts early. “Transparency eliminates surprises,” he said. “When we plan together, we perform better.”
Millcraft remains committed to helping customers navigate these conditions through data-driven insights, advanced supply-chain strategies, and a focus on simplifying complexity. From digital integration and automation to AI-assisted forecasting, the company continues to invest in tools that strengthen relationships and create a more resilient supply network.
Watch the State of the Graphic Paper Industry Q4 2025: Choppy Waters Ahead
Discover Greg’s complete analysis—including visuals, forecasts, and live Q&A—by watching the full recording.
If you have questions or want to discuss optimizing your print and paper strategy for best price, service, and availability, Millcraft can help. Just ask.