Dive Brief:
- A trade group representing large food and beverage manufacturers asked the White House administration for “targeted” tariff exemptions for key ingredients and other inputs imported by some of its members.
- The Consumer Brands Association, which represents companies including PepsiCo, Conagra Brands and Mondelēz International, wrote in a letter dated March 10 that the White House should ensure tariffs “deliver maximal impact without undue consequences” on U.S. manufacturers and consumers. Reuters was first to report the existence of the letter.
- While food companies make “every effort to source ingredients and inputs” from U.S. farmers and suppliers, the trade group said that some products are not available in the U.S., such as cocoa, coffee, spices and tropical fruits. Other inputs, like tin mill steel, face a limited domestic supply.
Dive Insight:
As the tariff war unfolds, the trade group representing major food and beverage manufacturers hopes the White House administration will ease the financial impact on its members.
“As prominent U.S. manufacturers, we adamantly endorse strong trade enforcement and protection mechanisms,” Melissa Hockstad, president and CEO of Consumer Brands Association, said in the letter. “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.”
Hockstad added that “targeted and carefully calibrated removal of these ingredients and inputs from tariffs” would protect U.S. manufacturers and support President Donald Trump’s efforts to lower consumer inflation.
Several executives have warned the tariffs are already impacting their operations and could eventually lead to price increases.
The Campbell’s Company CEO Mick Beekhuizen said tariffs could raise packaging costs and have a negative impact on its namesake soup brand.
Dirk Van de Put, CEO of Oreo-maker Mondelēz, told Food Dive that tariffs could make it more expensive to manufacture its cookies and crackers. Several years of inflation have already prompted manufacturers to pass on higher costs to consumers, leading shoppers to cut back on how much they purchase at the grocery store. The trade group and its members are concerned that tariffs will necessitate an additional increase in the price of some products, further reducing how much shoppers spend.
On Thursday, Trump said he would place 200% tariffs on wine, Champagne and other alcoholic products from Europe if the E.U. doesn’t rescind its countermeasures to U.S. duties. The administration already has levied 25% tariffs on steel and aluminum products.
