There’s no doubt that U.S. tariffs will negatively impact Canadian and European Northern Bleached Softwood Kraft Pulp (NBSK) and its end users, particularly U.S. tissue producers.
However, I’d like to highlight a potential unintended consequence of the tariffs.
The overpriced NBSK could push U.S. tissue manufacturers to adapt their furnish, potentially mirroring Brazil’s approach by switching to 100% hardwood pulp, assuming consumer acceptance driven by lower prices (not likely for towels’ quality requirement, though).
If this shift occurs, a return to NBSK-based furnish seems unlikely, given its significantly higher cost. Rather than encouraging an expansion of new cost-competitive U.S. softwood pulp capacity, the result could be increased reliance on Latin American hardwood pulp.
U.S. hardwood producers, even with tariffs in place, may struggle to compete with the cost advantages of bleached eucalyptus kraft pulp from Latin America.
