Sweeping tariffs announced by the Trump administration on April 2nd, along with tariffs previously enacted in March against Canada and Mexico, are being called the largest peacetime consumer tax hike in US history. The trade war is intensifying as US trading partners institute retaliatory tariffs against US-made products. A 10% baseline tariff on imports from most countries, plus country- and product-specific tariffs, will have broad effects as prices increase for US consumers across the board to account for the increased costs of imports.
How Tariffs Will Impact the US Food and Beverage Industry
Retaliatory tariffs will hit US food producers hard. The US exports significant amounts of its agricultural products to trade partners, including beef, corn, dairy products, pork, soybeans, tree nuts, and wheat. US beverage producers (especially those making wine and whiskey, including bourbon) will also face challenges since they export many of these products.
US consumers will also be hit with increasing prices at the grocery store. The food and beverage market experienced high price inflation in 2022 and early 2023, and prices have continued to rise since then. Higher base prices for food and beverage products, compounded with continued price increases, have been difficult for many of the consumers tightening their budgets over the last few years.
Packaged Facts’ March 2025 National Online Consumer Survey finds that the vast majority of consumers are concerned about rising food prices. 55% of consumers are very concerned about the rising prices of food, while another 30% are somewhat concerned about food price increases.
Tariffs will undoubtedly increase the prices of food and beverages even more, as many staples are imported from countries including Canada, China, Mexico, and members of the European Union, which will lead to higher wholesale costs being passed on to retail consumers.
More Price Increases at the Grocery Store
Here are just some of the food and beverage products that will see price increases in the US due to the new levies announced last week.
- Apple juice: 34% tariff (China) – China is the leading producer of apple juice globally and supplies a sizable portion of apple juice to the US market.
- Beer: 25% tariff (all imports), 25% aluminum can tariff (all imports) – Imported beer is very popular in the US, especially beer sourced from Mexico and EU countries. In fact, the Mexican brand Modelo Especial has been the top selling beer brand in the US since 2023. Additionally, a 25% tariff on all imported aluminum cans will increase prices of canned beer products, including those produced in the US.
- Carbonated soft drinks: 25% aluminum can tariff (all imports) – Many carbonated soft drinks and similar beverages, such as sparkling water, are packaged in cans, just like beer. Even US-produced beverages will be hit by tariffs since much of the aluminum used to package drinks is imported.
- Chocolate: 20% tariff (European Union), 10%-21% tariff (cocoa from countries like Côte d’Ivoire, the Dominican Republic, Ecuador, and Ghana) – Prices of chocolate will increase on top of already skyrocketing prices in the US as global demand for chocolate and cocoa increases while climate change is increasing crop failures.
- Coffee: 10%-46% tariff (countries like Brazil, Colombia, Ethiopia, Honduras, India, Indonesia, Peru, Uganda, and Vietnam are major suppliers to the US) – Prices of coffee will increase on top of already high price growth due to climate change-induced crop failures amidst rising global coffee demand.
- Pasta: 20% tariff (Italy is the leading source of imported pasta in the US).
- Rice: 26%-46% tariff (Asian countries including India, Pakistan, Thailand, and Vietnam account for most US rice imports).
- Tea: 34% tariff (China is a major exporter of tea to the US).
- Wine and spirits: 20% tariff (European Union), 10% tariff (many other wine-producing countries, including Argentina, Australia, Chile, and New Zealand) – Many wines and alcoholic spirits are imported to the US, especially from the European Union. Additionally, threats of even higher tariffs up to 200% on wine and spirits from the EU have already caused some importers to pause shipments. Though many wines and spirits are produced in the US, alcoholic beverage distributors rely on a product mix of both domestic and foreign products for their businesses, meaning that a pause on EU imports or increased prices on EU products will likely increase prices for US-made spirits and wines to account for increased costs.
Responses from Industry Players and Consumers
Expect food processors, retailers, and foodservice operators to make adjustments where possible, such as:
- diversifying supply chains
- adjusting recipes and assortments
- changing product sizes
- using cheaper packaging options
- innovating to use more products that are available locally or that haven’t yet been impacted by tariffs
Creativity will continue to be needed in terms of contracts, futures buying, and altering delivery schedules. Some producers will hold prices down for as long as they can, while others will be unable to reduce margins and will pass along the rising costs to buyers.
Additionally, consumers are likely to make adjustments in their grocery shopping habits. Purchasing cheaper cuts of meat, reducing purchases of organic produce in favor of conventionally farmed products, switching to more private-label foods, eating out less, and buying fewer treats are just some of the ways shoppers will look to save money on food.
Need More Market Data?
To access authoritative market intelligence and build effective, data-driven strategies, explore Packaged Facts’ extensive collection of reports on food and beverage trends and products. Recent reports cover topics including chocolate candy; food carryout and delivery; plant-based alternatives to dairy, eggs, and meat; online grocery shopping; organic and clean label foods; and Walmart grocery shoppers.
About the blogger: Cara Rasch is a food and beverage analyst for Packaged Facts. She studies consumer and industry trends in this space and has a B.A. in economics from Allegheny College.
