Food Tariffs 2025: How Trump’s New Trade Policies Are Disrupting the F&B Industry

In 2025, the United States faces a new round of Food Tariffs that could reshape the way many F&B businesses source ingredients and serve consumers.

Early data shows these policies could raise food prices by up to 25%, creating turbulence across the entire supply chain. 

The Tax Foundation estimates that newly proposed tariffs on Canada, Mexico, and China could shrink U.S. economic output by 0.4%, while raising tax revenues by $1.1 trillion from 2025 to 2034, adding an average tax increase of more than $800 per household in 2025.

Previous rounds of tariffs in 2018 and 2019 already generated nearly $80 billion worth of new taxes on Americans—one of the largest tax hikes in recent memory.

While the tariffs on Mexico and Canada have been “paused” after talks with the Mexican president and Canadian prime minister respectively, the tariffs remain a pressing concern should negotiations stall in the future.

What are food tariffs?

Food Tariffs are duties placed on imported goods that governments use to protect domestic industries or raise revenue.

When a country places tariffs on imported agricultural products, the goal might be to support local farmers or to pressure trade partners into new agreements.

However, tariffs can also push food import costs upward by a significant margin. When tariffs increase, importers pay more for raw materials and finished products, which can lead to higher prices for consumers.

The cost changes ripple through entire operations, from supply chain planning to menu pricing. This is what the current food supply chain tariffs scenario is doing to many F&B players.

Trump tariffs on food imports effect on F&B: why it matters now

The Trump tariffs effect on F&B has rapidly shifted from theoretical to practical. New import duties on products from Mexico, Canada, and elsewhere are hitting crucial ingredients, packaging items, and beverages.

While previous administrations also placed tariffs on steel, aluminum, and electronics, the current push affects a broader range of food items—everything from produce to canned goods.

Foods affected by tariffs and what food to stock up on before tariffs

According to internal supply chain trackers, numerous staples face elevated duties. Tomatoes, avocados, certain grains, cheeses, and meat products are at risk of steeper food import costs.

Industry experts suggest that businesses relying on these items consider alternative sourcing or short-term inventory planning.

With food tariffs looming—or in some cases already in effect—many businesses are closely watching how key imports from Mexico and Canada could drive up costs.

Two of the biggest categories are grains from Canada and fruit and vegetables from Mexico. According to the 2023 trade data below, these items make up a large share of cross-border shipments.

Any tariff increases on these segments could significantly raise food import costs for U.S. buyers.

Key impacted items from Mexico

• Fruit and preparations: $11,258.9 million
• Vegetables and preparations: $9,847.4 million
• Fresh or chilled fruit: $9,618.8 million

Key impacted items from Canada

• Grains and products: $8,954 million
• Cereal and bakery foods: $6,307.4 million
• Total vegetable oils: $5,058.3 million

Below is a simplified table illustrating selected high-value categories from each country. These are among the top products likely to see food supply chain tariffs in 2025:

Country	Category	2023 Import Value (Million $)
Mexico	Fruit & preparations	11,258.9
Mexico	Vegetables & preparations	9,847.4
Mexico	Fresh/chilled fruit	9,618.8
Canada	Total grains & products	8,954.0
Canada	Cereal & bakery foods	6,307.4
Canada	Total vegetable oils	5,058.3

With such sizable import volumes, tariffs on these goods could lead to price surges and supply constraints for U.S. distributors and retailers.

From fresh produce for restaurants to grains for packaged food manufacturers, businesses will need to manage these F&B revenue challenges by seeking alternative suppliers, adjusting menus, or exploring cost-optimization strategies.

Experts have advised stocking up on shelf-stable goods before the tariffs fully take hold, although this can be a gamble if policy changes are paused or reversed.

How the Mexico and Canada food tariffs are driving up prices

Mexico and Canada food tariffs are among the most impactful because the U.S. imports large volumes of produce, meat, and dairy from these neighbors.

The current policy imposes 25% tariffs on most foods from those countries, although specific exclusions apply to certain energy resources.

While some previous restrictions were lifted or paused, the ongoing policy remains a major concern. According to the Tax Foundation:

• 25% price increase: Many importers indicate that these tariffs translate to a real jump in food costs, hovering around a 25% hike.
• $800 per household: Projections show the average U.S. household could pay more than $800 in higher taxes next year due to tariffs.

The combined hit from these tariffs not only affects retailers and restaurants but also stirs consumer anxiety about rising grocery bills.

Impact of tariffs on restaurants & food businesses

Higher import fees create a chain reaction for operators. The impact of tariffs on restaurants often appears in the form of menu price changes, where owners pass on part of their added costs. 

Some large quick-service chains have the volume to negotiate better contracts, but smaller establishments lack that leverage. This discrepancy between large and small operators can widen profit gaps and threaten local eateries.

Beyond pricing, fresh produce shortages can occur if certain imports are either too expensive or stuck in customs.

Businesses with seasonal menus or farm-to-table marketing may struggle to maintain consistent product quality if they must swap out their usual items. 

Meanwhile, supply chain managers must rethink their vendor relationships to reduce food supply chain tariffs and keep distribution smooth.

What this means for F&B revenue & consumer behavior

Steeper food import costs and the Trump tariffs effect on F&B can lead to F&B revenue challenges for both manufacturers and retailers.

Many brands now weigh trade-offs: either absorbing losses or raising prices to protect margins. As costs go up, some consumers may shift to domestically produced alternatives or cheaper private-label products.

According to the Tax Foundation, these trade measures, if permanent, could generate $1.1 trillion for the federal government from 2025 to 2034.

While that might seem to support public budgets, businesses on the ground must deal with everyday disruptions—logistical headaches, higher labor requirements, and the push to pass along costs in a market sensitive to price swings. 

A drop in consumer spending is also possible if people cut back on dining out, especially with menu prices under pressure.

How Tastewise helps F&B brands adapt to food tariff disruptions

Tastewise uses real-time consumer data and technology tools to keep brands informed about trending foods, shifting price thresholds, and new dining behaviors.

By analyzing millions of data points on social media, recipes, and restaurant menus, Tastewise guides manufacturers and foodservice operators to:

• Refine product offerings: Identify which flavors or ingredient combinations still excite consumers, even when prices go up.
• Optimize messaging: Highlight local origins or cost-friendly options to address worries about tariffs and rising bills.

These insights help executives respond quickly instead of guessing how consumers will react. Use them to maintain loyalty and protect margins, even when grappling with F&B revenue challenges.

If you’re unsure about your next move, consider a short conversation with the Tastewise team. During a demo, you can see how data-driven insights reduce guesswork and support stable growth.

FAQs

How are major agricultural inputs like fertilizer impacted by the Trump Tariffs?

Tariffs on key agricultural trading partners, including Canada, have raised concerns about rising fertilizer costs for U.S. farmers. Canada supplies approximately 80% of a crucial fertilizer ingredient used in growing crops such as potatoes, lettuce, and legumes.

With a 25% tariff now applied to most Canadian imports, producers fear price spikes just before planting season.

Higher fertilizer costs can significantly impact overall production expenses for commodity crops, potentially leading to increased food prices and supply chain disruptions.

Farmers and agribusinesses will need to closely monitor market changes and explore cost-saving strategies to mitigate the financial strain.

Will tariffs affect food prices?

Yes, tariffs can dramatically affect food prices. When fees increase on imports, companies must either absorb the added expense or raise prices to protect profitability.

This leads to higher grocery and restaurant bills, especially for goods reliant on foreign suppliers.

Final Thoughts

Many in the industry anticipate continued friction in cross-border trade. With the 10% tariffs on Chinese imports now in effect and a 30-day pause on Canada and Mexico tariffs, the impact on F&B is already unfolding.

Added costs and potential supply constraints make it essential for businesses to plan ahead.

The F&B sector has always adapted to shifting consumer demand and logistical challenges—tariffs are just another hurdle.

By leveraging the right data, making timely adjustments, and refining your strategy, your brand can navigate these changes and maintain resilience.