President Donald Trump stops an application for tariffs, which was escaped by the US Minister of Trade Howard Lutnick in the Oval Office of the White House in Washington, DC, USA, on February 13, 2025.
Kevin Lamarque | Reuters
The fear of rising costs for the supply chain as a result of President Donald Trump's new tariff, which is expected to be implemented on Wednesday-“Liberation Day”, as Trump calls it, have small to medium-sized companies that reject opportunities to expand their market share with too much economic uncertainty in the near future. On Tuesday, Trump said the plan for the tariffs was ready and the administration said that trade taxes will come into force “immediately”.
“This is heartbreaking,” said Anjali Bhargava, founder of the Anjali's Cup, who produces retail spice packages.
Bhargavas Ayurveda-inspired turmeric and chai mixtures with spices from Vietnam, Thailand, Africa and South America; Tea and pepperkorn from India; Saffran from Afghanistan; And special retail packs in China are sold through retailers such as Whole Foods, and there is little space for important price changes.
“My edges are thin,” said Bhargava. “The people with whom I work with independent foreign farmers who ensure their spice harvest from 2024 are spices that have not grown on the size that I need here in the United States.”
The risk of global tariffs has already revised the small business owner plans for core marketing efforts. In June the big event of the Specialty Food Association, the SFA SFA Summer Fancy Food Show, but Bhargava said it may not be participated, since the packaging she needs for products may no longer be available at a price that can be absorbed.
“I came up with pivots, but it is so challenging that I am at a point with my business where I can finally put my foot on the gas, but now I don't know if it will be possible to keep business going,” said Bhargava.
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Anjalis cup cans produced in China
Anjalis cup
Four years ago, she moved the production of her spice cans to China, since in addition to her online business, she aimed more market shares from national retailers such as Whole Foods. But tariffs that force them to create new domestic offers endangers growth. “I have to rethink my entire retail strategy because the packaging costs are not sustainable,” said Bhargava. “I try to take part in the retail shelf. I have nice retail boxes and in the USA, the costs would be twice and at astronomical quantities.”
Bhargava, like countless other small business owners, said the quality and affordability of a knife, and the proposed tariffs not only threaten their livelihood, but also the essence of what makes the US market in many ways, authentic and innovative.
Bhargava said that she tried to get into the cans with ingredients within the borders, but the effects of tariffs on their business affect many other companies at the same time. “I deliver coffee companies and other smaller companies. I have warehouses and truck services that move my product. There are many parts in the world of food,” she said. “I was lucky enough to get that far, but my business future feels so unpredictable because of the tariffs.”
Bruce Kaminstein, former owner and CEO of the company Casabella Casabella, and now a Angel investor in consumer goods companies, said that tariffs can praise companies such as Bhargava's Out of Business, which ultimately reduces the selection of consumers.
“We will lose innovation and essentially the American dream,” said Kaminstein. “I saw this first -hand when I sold Casabella in other countries with a high tariff. There was less product selection for consumers.”
He said, while he fears for a “level paid area”, in which US brands can sell overseas “without tariff prejudices, there must be a scalpel approach when executing.”
“In some industries you can't get everything in the United States,” he said.
Supply chains that are already switched off say large food companies
Anjalis Cup is just an example for many large and small companies that are facing the new trade war at an economic moment, in which the ability to take more price becomes more difficult.
In a letter to the White House, the Consumer Brands Association, which corresponds to about 90 legendary brands as possible Coca-ColaPresent McCormick spicesAnd CloroxIf the “current unit approach for the protection of house manufacturers” wrote to reflect the restrictions on the supply chain and the reality in raw material and import markets.
Tom Madrecki, Vice President for Campaigns and Special Projects for the Consumer Brands Association, said that his member companies are the largest employer in the domestic processing of businesses, but you cannot unload products before tariffs due to spoiled and seasonal demand trends in food.
Members include General MillsPresent Colgate palmoliveAnd MondelezAnd Madrecki said that many are produced for the “American first” politics and products in rural parts of the country.
“Nobody denies that,” said Madrecki about the goal of having more domestic production. “The problem is that the supply chains are incredibly aligned, the costs are high, the costs for the ingredients are high, there is a persistent inflation of food and consumers. There is no margin for these products,” he said. And he added that, in contrast to the trade war, during Trump's first term at a time in the economy in which inflation was much lower and the costs could be absorbed, “this time cannot be absorbed anywhere. The prices have to rise or the US manufacturers will bear the main load.”
The Canadian oat is a good example of a raw material market where tariffs have a major impact on staple foods. The grain is used in many muesli, since there is not enough domestic oats to satisfy the demand. Canada is the world's largest producer and exporter of oats, and over 90% of the oats ground for food in the United States are moved from Canada. The growth conditions are better in Canada, said Madrecki, and due to a decline in the oat construction area in the United States, which goes back to the 1940s, there is no longer any sustainable system for growth, storage and transporting US farms into the mills that are required for the food industry.
Iowa's economy will be exposed to a great success of tariffs on Canadian oats.
“Two of the world's largest oat copies are companies in the US consumer goods that employ thousands of employees in Cedar Rapids, Iowa,” said Madrecki. “Both are dependent on oats from Canada to produce their food products here.”
Commercial and transport costs are piled up
Nick Rakovsky, CEO of Datadocks, a planning system for planning supply chains, said that the economy of the trade war and the cost effects require an analysis that goes beyond the import of products from abroad.
“I don't just see the topline number of the tariff,” said Rakovsky. “I look at the entire company, the supply chain and how everything can be affected. There is so much to consider if a new supplier is swung.”
Companies that want to change suppliers must check the location of the new procurement material and where the new suppliers are located when they are near the currently used ports, new local laws and regulations, business costs associated with special licenses, quality control, and even the way the freight is packed.
“If Labor opens the doors of the container and it is not packed in the usual way, since the supplier does it differently than the previous supplier, it can take longer for the supplier to discharge,” said Rakovsky. “This costs more money. Even the way the freight is unpacked has to be taken into account. In the end, a company has to ask to alleviate the costs for tariffs, money?”
Consumer goods such as knives are now facing a double strike of tariffs for foreign production and foreign steel.
Eunice Byun, who came along seven years ago after a career at Goldman Sachs the kitchen product company Materials Kitchen, sells their products online and in retailers such as the container store, blooming dales and SAKs. The knives of the material kitchens are made in China, Korea and India.
“With the Trump tariffs we had to increase the prices for our steak knives (3) of 90 to 110 US dollars,” said Byun. “We also have a new product outside of Finland that could now be touched. This is something that we have never planned. We now have to see how this affects pricing.”
In order to alleviate the China -Zölle, Byun wanted to bring production to Canada, but since the Trump trade war has now brewed, this planning has stopped.
Byun said the largest cloud of uncertainty for her business was the inventory management. “As a growing company, you are a viral video from your inventory, which is sold out. It is the most difficult to control. We drive with this wave and need more clarification about what the tariffs are and when regions are affected.”
In the short term, frontloading products is an option if the product has a durability. In the long term, however, the duration of a tariff must be taken into account in every company.
All tariffs implemented by Trump could be reversed by a subsequent administration. For example, President Biden increased tariffs for steel and aluminum in October 2021. However, the question of the tariff duration is another problem that leads the industries to weigh the advantages and disadvantages of changing supply chains.
“It is not the case that they simply get a new supplier and work with them,” said Brian Farley, Vice President of the Business Intelligence company Dun & Bradstreet. “Unless you have already promoted an appropriate replacement relationship. These things take time.”
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