Major Food Manufacturers Request Tariff Exemptions in the US

Leading packaged food manufacturers have asked President Donald Trump for specific exemptions from import tariffs, arguing that certain essential ingredients unavailable domestically should not be subject to trade restrictions. According to a letter sent Monday by the Consumer Brands Association, a trade group representing companies like PepsiCo, Conagra, and J.M. Smucker, manufacturers are requesting exemptions for ingredients that are not available from domestic sources. 

The letter explains that the goal is to protect manufacturers that otherwise source from US farmers and suppliers. “As prominent US manufacturers, we adamantly endorse strong trade enforcement and protection mechanisms. Our hope is that the current one-size-fits-all approach for protecting domestic manufacturers can be adjusted to reflect supply chain constraints, informed by commodity and import data,” reads the letter.

Tom Madrecki, Vice President of Campaigns and Special Projects, Consumer Brands Association, said the letter aims to open a conversation with the Trump administration regarding exemptions. He emphasized that trade enforcement, including tariffs, should be applied strategically to protect manufacturers. Among the imported products unavailable in the United States are coffee, oats, cocoa, spices, and tropical fruits.

The latest round of tariffs imposed by Trump on products from China, Canada, and Mexico comes at a sensitive time for the US packaged food and consumer goods industry. Mondelēz, which produces some of its cookies and crackers in Canada and Mexico for the US market, is exploring ways to offset tariff-related costs. In an interview with Food Dive, Dirk Van de Put, CEO, Mondelēz, noted that tariffs could make production more expensive. Several years of inflation have already pushed manufacturers to increase prices, leading consumers to reduce their grocery purchases.

The trade group and its members worry that tariffs will force further price hikes, potentially curbing consumer spending even more. In response, Mondelēz is preparing to ramp up promotions and marketing for brands like Oreo, Ritz, and Chips Ahoy!, aiming for higher sales volumes to counterbalance the added costs. "We are in full preparation for possible tariffs. It is imminent, and it would affect us. We would not be doing our job if we were not preparing,” said Van de Put.

Beyond food ingredients, import tariffs are expected to affect packaging materials. Mick Beekhuizen, CEO, Campbell’s Company, warned that tariffs could drive up packaging costs, negatively impacting its signature soup brand. Similarly, Jeff Harmening, CEO, General Mills, highlighted that duties on steel could impact packaging for Progresso soup, Blue Buffalo pet food, and Yoplait lids. Additionally, James Quincey, CEO, Coca-Cola, previously stated that rising aluminum costs could push the company to shift from aluminum cans to more plastic bottles if necessary.

Consumer Reactions and Economic Impact

Brittany Quatrochi, Analyst, Edward Jones Consulting, noted that predicting the full impact of tariffs remains a challenge. Many companies are focusing on scenario planning to respond effectively depending on how the situation unfolds. She added that if tariffs on Canada and Mexico were enacted, businesses would likely pass the costs to consumers.

“We do not see it as a major headwind for these companies. They are trying to make smart, cost-effective decisions, and until there is clarity around tariffs, it is very difficult for them to do anything production-wise,” said Quatrochi.

A study by Numerator found that nearly two-thirds of consumers worry about tariffs increasing the cost of everyday goods, particularly groceries. The study also revealed that 76% of shoppers plan to adjust their purchasing habits in response to higher prices, including seeking out discounts, stocking up before price hikes, or delaying purchases.

According to the Tax Foundation, tariffs imposed by the Trump administration resulted in US$80 billion in new taxes on Americans, covering US$380 billion in goods between 2018 and 2019. This represents one of the largest tax increases in US history.