US food industry wants relief from tariffs
The American food industry is advocating for relief from the recent tariffs, cautioning that the duties imposed on essential imports could lead to increased consumer prices and put pressure on restaurants and retailers. A report indicates that restaurant operators and retailers warn that tariffs imposed on seasonal or non-substitutable goods would quickly result in increased menu prices and grocery expenses. Experts referenced in the report observed that even slight upticks in tariffs are intended to elevate prices, and the magnitude of recent actions could render the effects quite apparent to consumers.
While a significant portion of food consumed in the United States is sourced from domestic production, approximately one-fifth is derived from imports. In certain categories, the level of dependence is significantly heightened. Seafood, fruits, and vegetables exhibit particular susceptibility, as the expansion of US production faces significant constraints stemming from climate, environmental, or regulatory limitations. Seafood imports underscore the magnitude of the challenge. According to data from the US Department of Agriculture’s Economic Research Service, the leading suppliers to the country are Canada, Chile, India, Indonesia, and Vietnam. These exporters represented over fifty percent of US seafood imports in 2024. In FY24, India exported approximately $2.3 billion in shrimp to the United States, accounting for over 90 percent of its seafood exports to that particular market. The recently implemented 50 per cent tariff on Indian seafood, announced on August 27, has adversely affected that trade.
Fresh produce represents a particularly delicate segment of the market. In 2023, Mexico was responsible for 51 percent of the United States’ fresh fruit imports, with Canada contributing an additional 2 percent. In terms of vegetable supply, Mexico accounted for 69 percent while Canada contributed 20 percent. In the case of certain crops, cucumbers in particular, it is noteworthy that nearly 90 percent of the supply is sourced from imports. This reliance indicates that any tariff-induced shock will rapidly manifest as increased prices at the supermarket level. The trade agreement provides protection for North America, while leaving other regions vulnerable. The implementation of these tariff measures exhibits a lack of uniformity. Under the USMCA trade agreement, goods exchanged among the US, Mexico, and Canada are predominantly free from new tariffs provided they comply with the established origin regulations. This preserves a significant portion of the fruit and vegetable trade across North America.
Meanwhile, products from outside the bloc, including seafood from India, Chile, Indonesia, and Vietnam, are subject to the new tariff regime.
- Mexico has implemented a 25 percent tariff on the majority of goods, while providing exemptions for trade under the USMCA framework.
- Canada imposes a 35 per cent duty, while still allowing exemptions for goods that comply with USMCA regulations.
- China has imposed a 30 per cent tariff, accompanied by warnings of a potential increase to 145 per cent.
- India has implemented a 50 per cent tariff as of August 27, which has doubled from the previous rate of 25 per cent, a move that is linked to its ongoing purchases of Russian oil.
- Indonesia is projected to experience growth rates ranging from 15 to 19 percent.
- Vietnam and Chile: 10 to 41 percent.
The food sector in the United States is actively pursuing measures for relief. Despite the increasing costs that have generated considerable frustration, industry associations are refraining from advocating for a reversion to unrestricted free trade. Instead, a targeted approach is being sought that protects categories the US cannot realistically produce, while allowing for initiatives to reshore production where feasible.
