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Bettina Makalintal covers restaurant trends, home cooking guidance, and the latest viral food phenomena at Eater.com. She has previously contributed to Bon Appétit and VICE’s Munchies. Jaya Saxena is a correspondent at Eater.com and series editor for Best American Food and Travel Writing, focusing on diverse subjects such as labor, identity, and food culture.
Recently, President Donald Trump disclosed a revised set of reciprocal tariffs affecting a majority of the United States’ trading partners, which he characterized as a step towards “economic independence” as well as a pursuit “to make America wealthy again.” The implementation includes a basic tariff of 10 percent on all imports, supplemented by significantly higher tariffs on countries deemed “worst offenders” in trade, including a staggering 49 percent on imports from Cambodia, 46 percent from Vietnam, 34 percent from China, 27 percent from India, and 24 percent from Japan. The stock market’s reaction has been decidedly negative, leading food companies to reassess their strategies amidst this turmoil.
Rodrigo Adão, an associate professor at the University of Chicago Booth School of Business, notes that tariffs often result in increased expenses for consumers in the U.S., with costs shared between consumers and importers. For instance, companies that rely on importing coffee from Indonesia, now subject to a 32 percent tariff, may either suffer reduced profits or pass the added costs onto consumers.
Trump suggests that these tariffs will lead Americans to purchase more domestically produced goods. However, there are numerous essential products not cultivated within the United States. For example, the newly imposed 27 percent tariff on Indian imports poses a significant threat to the supply of bananas, while other staples like coffee and chocolate remain practically irreplaceable domestically. Adão emphasizes that even if farmers attempt to grow coffee stateside, it would take considerable time and resources, and the land may have been designated for other agricultural uses.
Companies like Fly By Jing are already feeling the impacts of these tariffs, as many U.S.-based businesses continue to rely on international ingredients. We spoke to several entrepreneurs in food-related industries who shared their predictions on how these tariffs will affect their operations and, by extension, the wider market.
“Essentially, it’s going to be a lot less innovation”
Ethan Frisch and Ori Zohar, co-founders of Burlap & Barrel, a spice company focused on equitable supply chains
Eater: How do you perceive the impact of these new tariffs on your business? Did the announcement catch you off guard?
Ethan Frisch: We were aware of rumors about a potential 10 percent tariff, but its broad implications are significant, especially since many of the countries affected are key suppliers for us, like Vietnam. An almost 50 percent tariff on our best-selling Royal Cinnamon raises serious questions about its viability and complicates the business model we’ve cultivated over recent years.
Ori Zohar: We’re making decisions for the upcoming holidays right now, but the volatility in economic policy makes it immensely challenging to predict what our needs will be. We can barely plan for April, which creates operational difficulties.
What steps do you plan to take in response to the tariffs?
OZ: We’re adopting a leaner approach during this uncertain period. We’ve halted hiring and are slowing our pace of operations. Although we launched over 50 new products last year, we’re now scaling back due to the tariffs and economic apprehensions from our customers.
EF: We operate as a social enterprise and prioritize not passing these costs onto our partner farmers. Our aim is to absorb these expenses ourselves. Unfortunately, this means less innovation, as we focus on existing products with a proven market instead of taking risks on new, niche items.
In preparation, we initiated our largest sale ever to build a financial cushion for the impending changes. Our commitment remains to keep prices accessible by cutting out intermediaries and ensuring fair compensation for farmers.
What makes your business particularly vulnerable to these changes?
OZ: The nature of our spice business necessitates global partnerships. Many of our core offerings, such as Royal Cinnamon, relate uniquely to their original regions. An attempt to replicate them domestically would fail to capture their authentic flavors and characteristics.
Interestingly, there isn’t a domestic spice industry to be protected in the U.S. We do work with some local farmers for items like chilies and garlic; however, staples like cinnamon and cumin will require us to import, and we’re facing heightened costs as a result.
Are your farming partners feeling the strain as well?
EF: American trading reputation has historically been strong; our partners worldwide have relied on it for fair compensation. Currently, there’s newfound anxiety among them regarding future transactions, and they look to us for reassurance, which we strive to provide.
OZ: Unlike other sectors where transitioning to new suppliers may be feasible, our agricultural partners work on an annual cycle. Our spices can’t simply be shifted due to tariff changes; that uncertainty adds stress without clear benefits for consumers.
EF: The chaos seems to be exacerbated intentionally. Maintaining our integrity as a company is of utmost importance. Consumers should support businesses with transparent supply chains that emphasize quality, especially now.
“We don’t want to underpay the growers or suppliers”
Frederico Cervellin, Chief Product Officer of Natoora, a food supplier and importer for restaurants
Were these developments anticipated by your team?
FC: We had been hearing speculation about potential tariffs for months, though the specific percentages confirmed yesterday were indeed impactful. Fortunately, our focus on domestic produce buffers us somewhat, but we still rely on imports from Europe for specialty items like chicory and white asparagus.
Is it feasible to transition to domestic sources for these specialty products?
FC: We are initiating a domestic line for tomatoes, but the quality differences are pronounced; our European imports, especially from Italy, deliver a level of acidity that’s hard to match. Alternatives exist for olive oil, but they typically come from smaller, pricier operations that wouldn’t suffice for mass production.
How do you see these tariffs affecting business in the short term?
FC: Given the rapid developments, I anticipate many clients will stock up on dry goods as a hedge. Clients are likely to monitor the situation closely—should the 20 percent stay in effect, the options may lead to inevitably passing costs onto the consumer. Yet, we’re committed to ensuring growers are paid fairly and won’t engage in supplier price squeezes.
The situation isn’t ideal, amplified by uncertainty. A clearer timeline would provide better planning opportunities. Drawing parallels to the chaos of Brexit reveals the detrimental impact of last-minute changes.
“Right now, I’m honestly contemplating our survival”
Sam Fore, chef and owner of Tuk Tuk Snack Shop, a Sri Lankan and Southern restaurant in Lexington, Kentucky
You’ve discussed how one of your suppliers has announced a 44 percent increase in prices for products from Sri Lanka. What implications does this hold?
We offer more than just food; our cocktail and wine menus also reflect various regions. Increased tariffs on these products have already influenced our purchasing decisions as we strive to source locally, a tactic that remains cost-effective. However, many notable ingredients from Sri Lanka give our cuisine its unique charm.
Many of these ingredients are not grown in the U.S.
Take kithul, for instance—a palm syrup from Sri Lanka that’s irreplaceable here. Substituting with alternatives like sorghum simply isn’t feasible. We incorporate kithul into numerous dishes, but now I must reevaluate my entire menu in light of these price hikes, just as we launched our spring offerings.
How do you plan to balance the cost increases against passing them on to customers?
With margins so tight, raising prices is tricky. While some patrons understand, many simply voice their dissatisfaction online. At the moment, I’m grappling with survival, as the essence of Sri Lankan cuisine permeates our offerings. Removing these distinct flavors could profoundly alter guest experiences.
Trump claims these tariffs will foster domestic production and bolster American businesses. Do you agree?
Having grown up in North Carolina’s textile regions, I appreciate the concerns. The reality, though, is that a 44 percent tariff will generally inflate prices for everyone, exacerbating existing challenges. Products like kithul or Ceylon cinnamon cannot be sourced here, forcing us to rethink our operational costs.
The content of these interviews has been edited for brevity and clarity.
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