President Donald Trump holds an executive order about tariffs increase, flanked by U.S. Commerce Secretary Howard Lutnick, in the Oval Office of the White House in Washington, D.C., U.S., February 13, 2025.
Kevin Lamarque | Reuters
**Rising Concerns in the Food Industry: A Tariff Predicament**
In a dramatic turn of events, small to medium-sized businesses are grappling with the **impending tariffs announced by President Donald Trump**. Scheduled for implementation on a day dubbed “Liberation Day”, these tariffs are sending shockwaves through the food sector, causing many entrepreneurs to reconsider their growth strategies amid a fog of **economic uncertainty**. According to Trump, the tariffs will take effect “immediately”, leaving businesses like Anjali’s Cup, a purveyor of artisanal spices, on the brink of re-evaluation.
**“This is heartbreaking,”** expressed Anjali Bhargava, founder of Anjali’s Cup, which specializes in **Ayurveda-inspired spice blends**. Her meticulously sourced ingredients—ranging from turmeric and chai spices from **Vietnam, Thailand, and Africa** to saffron from Afghanistan—are integral to her brand identity. As she sells through retailers like Whole Foods, Bhargava faces an unsettling reality: the new tariffs leave **little room for price adjustments**.
“**My margins are thin**,” noted Bhargava, pointing out the fragility of her supply chain and her reliance on independent farmers abroad who provide her with rare spices. Unlike traditional American-grown products, the **exotic spices** she needs cannot be sourced domestically.
**Anjali’s Cup tins made in China**
Anjali’s Cup
**Facing the Impacts of International Trade**
Four years ago, Bhargava made the **strategic decision** to move her manufacturing of spice tins to China to optimize costs and quality. With aspirations to capture a larger share of the national retail market, her company now faces uncertainty as the new tariffs might **cripple her competitive edge**.
**“I will have to reconsider my entire retail strategy,”** she lamented, noting that the tariffs could compel her to fork out double the cost for U.S.-made tins, a change she simply cannot afford.
**“Trying to compete on the retail shelf,”** Bhargava explained, requires her to maintain not just quality but also affordability. With so many small business owners navigating the nuances of supply chains, the proposed tariffs constitute a significant threat, not just to individual livelihoods but to the **culinary diversity** that makes American markets flourish.
Moreover, Bhargava highlighted her predicament of stocking up on essential ingredients, all while feeling the ripples of **global tariffs** now surfacing across her entire support system of suppliers and transport mechanisms. **“There are many links in the world of food,”** she noted, emphasizing the interconnected nature of today’s supply chains. “My business future feels unpredictable due to these tariffs.”
Bruce Kaminstein, former CEO of Casabella and now an angel investor, adds that these tariffs hold the potential to **price companies** out of business, ultimately stripping consumers of diverse product choices. **“We will lose innovation and essentially the American Dream.”** Kaminstein witnessed firsthand how high tariffs diminished consumer options during his time selling products abroad. **“A scalpel approach is necessary,”** he insisted, recognizing that some industries simply cannot source everything domestically.
Voices from the Industry: Food Giants Sound Alarm
**Big Food Companies Raise Concerns**
Anjali’s Cup is just a microcosm of a larger issue. The **Consumer Brands Association**, which represents major players such as Coca-Cola, McCormick Spices, and Clorox, has penned a letter to the White House calling for adjustments to the **one-size-fits-all approach** aimed at protecting domestic manufacturers.
Tom Madrecki, vice president of the Consumer Brands Association, stated, “**Supply chains are incredibly tapped out, costs are high… there is no margin on these products**.” Unlike previous tariff rounds when inflation was manageable, the current landscape means **there’s nowhere to absorb these costs**, signaling potential price hikes or dire impacts on manufacturers.
**Impact on Essential Commodities: The Oat Example**
Canadian oats illustrate the perilous impact of tariffs on staples. Canada, the world’s leading oat producer, supplies over 90% of the oats used in U.S. cereals, leaving a significant **dependency** on imports. With the disheartening decline of U.S. oat farming since the 1940s, the tariffs could **devastate** regions reliant on these grains, particularly Iowa, where major consumer product companies depend on external oat supplies for their food products.
Trade Costs and the Ripple Effect
**Understanding Supply Chain Dynamics**
As the conversation shifts to the economics of the trade war, Nick Rakovsky, CEO of DataDocks, points out that **analyzing the impacts of tariffs** requires delving deeper than merely the upfront costs. Businesses need to assess how these changes affect every facet of their supply chain—including sourcing, transport, and even packaging methods.
“Companies looking to change suppliers must consider the entire ecosystem, examining local laws and regulations, cost implications, and quality control measures,” Rakovsky explained. Not to mention, unpacking items could incur additional costs if not done according to **transport protocols**. **“Does the pivot really save money?”** is a pressing question on many entrepreneurs’ minds.
**Eunice Byun**, co-founder of Material Kitchen, faces similar challenges with her kitchen products, many of which are manufactured overseas. The tariffs have inevitably led to **price increases** for her products. **“We’ve had to raise our steak knife set price from $90 to $110,”** she revealed, also sharing doubts about potential tariffs on new products in the pipeline.
As Byun contemplates shifting production to Canada, the **trade volatility** has stunted her plans. Inventory management looms as the most significant concern for her burgeoning business. **“You’re one viral video away from selling out,”** she lamented, stressing the unpredictability of product availability under the current circumstances.
**Looking Ahead: Navigating Uncertainty**
The looming threat of tariffs raises questions about **long-term strategies**. The potential for shifts in political administrations to reverse existing tariffs adds another layer of uncertainty for businesses considering new supply chains.
As Brian Farley from Dun & Bradstreet emphasized, **“It’s not a simple case of finding a new supplier.”** Establishing trust and solidifying relationships takes time, especially in an ever-changing environment fraught with unpredictability.
