The Trump administration’s sweeping new tariffs—described by some as “everything, everywhere, all at once”—are poised to significantly impact the U.S. food and beverage industry. With a baseline 10% tariff taking effect on April 5 and additional reciprocal tariffs of up to 50% kicking in on April 9, the costs of importing both ingredients and equipment are set to rise sharply. Meanwhile, American exports could face retaliatory tariffs that threaten global competitiveness.
President Trump cited an “economic emergency” as justification for the move, stating that the tariffs are intended to correct unfair trade practices. The administration claims the higher “reciprocal tariffs” simply mirror the trade barriers imposed on U.S. products by other nations. But the methodology behind the calculations—often including currency policies, trade surpluses, and loosely defined barriers—has drawn criticism for its opacity and questionable accuracy.
Higher Import Costs Could Squeeze the Food Industry
The tariffs are expected to drive up costs across the supply chain. For the food and beverage sector, this includes critical imported ingredients like vanilla, cacao, and black pepper—products that cannot be cultivated in the U.S. due to climate constraints. Madagascar, the primary source of vanilla, will be hit with a 47% tariff.
“There are critical ingredients and inputs that need to be imported due to scarce availability domestically,” said Tom Madrecki, Vice President of Supply Chain Resiliency at the Consumer Brands Association (CBA). “No amount of tariffs will bring these inputs back to the U.S.”
Food processing equipment is also under pressure. According to PMMI (the Association for Packaging and Processing Technologies), new tariffs will add an estimated $1.3 billion in extra costs on $6.1 billion of imported machinery—an average increase of 21%. Approximately 24% of packaging machinery in the U.S. is sourced from overseas.
The impact of earlier 25% tariffs on steel and aluminum is already being felt. Canners, soft drink makers, and brewers are grappling with rising costs. Coca-Cola CEO James Quincey has indicated that the company may shift further toward plastic packaging if aluminum becomes too expensive.
The International Dairy Foods Association (IDFA) expressed concern over the broader implications. “The U.S. dairy industry depends on strong trade relationships and access to essential ingredients, finished goods, and equipment to provide safe, affordable dairy products,” IDFA noted in a statement. “Disruptions could affect consumers and weaken rural economies.”
Some in the industry are pushing for exemptions on specific categories of machinery and ingredients that support domestic manufacturing and jobs.
Exports Face Rising Retaliation Risks
While the Trump administration aims to boost the domestic industry, food exporters may face significant setbacks as trading partners prepare countermeasures. The Consumer Brands Association emphasized that the consumer packaged goods (CPG) sector is already the largest manufacturing employer in the country, supporting over 22 million jobs and contributing $2.5 trillion to the U.S. GDP.
CBA urged the administration to consider the impact of its trade strategy on companies that are already manufacturing domestically and adhering to fair trade practices.
The dairy sector, in particular, has expressed concern about losing hard-won international market share. The IDFA pointed out that the U.S. dairy industry exports more than $8 billion worth of products annually to nearly 150 countries. With $8 billion in domestic processing investments already made, the industry fears tariffs could undermine global competitiveness.
“We support holding trading partners accountable,” IDFA stated. “But prolonged tariffs on our top export markets could raise costs, create uncertainty, and diminish the return on investment in U.S. dairy infrastructure.”
A joint statement from the U.S. Dairy Export Council and the National Milk Producers Federation acknowledged the need to challenge unfair trade practices from the EU and India, particularly regarding non-tariff barriers such as restrictive cheese labeling laws. Still, the groups warned against jeopardizing otherwise positive relationships with major trading partners.
“We encourage the administration to move quickly in negotiating terms that not only eliminate tariff and non-tariff barriers but also expand global opportunities for U.S. agriculture,” the statement concluded.
Negotiation Still Possible
Despite the sweeping nature of the tariffs, there remains a chance for reversal or revision. Trump has a history of using aggressive trade actions as bargaining chips to bring countries to the negotiating table. However, for now, industry stakeholders are bracing for immediate financial strain and long-term uncertainty.
As the global food industry watches closely, the question remains: Will these tariffs lead to stronger trade deals—or unintended damage to American businesses already deeply integrated into international markets?