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Orange chocolate has been removed from the offerings at Annie Park’s ice cream parlor, reflecting broader trends in the market.
Due to rising cocoa prices—nearly doubling amid tariff-related uncertainties—Park, co-owner of Sarah’s Handmade Ice Cream in the Washington, D.C. area, has opted for changes to accommodate the financial strain. To avoid raising prices for her customers, she has discontinued the orange chocolate flavor and is exploring the possibility of eliminating or reformulating other cocoa-rich flavors.
“We’re finding innovative ways to adapt,” Park told a reporter. “But it’s a day-to-day situation when it comes to planning.”
The landscape has shifted significantly since the Trump administration enacted a broad set of tariffs on imports, which included a 10% fee on goods from many countries, up to 25% on those from Canada and Mexico, and a staggering 145% on Chinese imports. While tariffs on numerous other countries have been suspended until July 8, 2025, China remains excluded from this pause, complicating matters for many small businesses.
Small Businesses Face Increased Pressure
For small food establishments like Sarah’s Handmade Ice Cream, rising costs have become a pressing concern, exacerbated by ongoing inflation. Cocoa prices had already been rising prior to the implementation of the new tariffs.
“We’re weighing our options carefully,” Park stated. While the business is currently absorbing some of the increased costs, future price hikes remain a possibility: “That decision hasn’t been made yet.”
Other key ingredients are also seeing price increases. Sugar and chocolate chips are now more expensive, and the cost of customized supplies—such as cups and aprons—has risen, predominantly because they are sourced from China. Although Park is attempting to source these items from U.S. suppliers, she notes that the alternatives tend to be more costly and have longer lead times, creating challenges in meeting customer demand.
As tariffs come into effect, some suppliers are delaying shipments as they navigate how to manage these added costs, further contributing to the uncertainty Park faces. To mitigate potential disruptions, she prepared in advance by accumulating nonperishable supplies last December, even renting extra storage. However, perishables including cocoa can’t be stockpiled in the same manner, restricting her options as expenses continue to climb.
“You may think it’s a global issue,” Park remarked, “but local families are the ones bearing the brunt of it on a daily basis.”
Difficulties in Sourcing Domestic Ingredients
Chef Ji Hye Kim, who runs Miss Kim in Ann Arbor, faces similar challenges. Many essential Korean pantry staples—such as sesame oil, soy sauce, and fermented soybean paste—cannot be sourced domestically at the necessary quality or quantity.
“We strive to purchase as many local American products as possible,” Kim shared, “but for some items, that simply isn’t feasible.”
Even when domestic producers exist, Kim explains, their products are typically geared toward retail or gourmet markets, falling short of the volume her restaurant requires.
According to Tom Madrecki, vice president at the Consumer Brands Association, this scenario is indicative of a larger trend in the consumer goods industry. “For items not available domestically—like coffee, cocoa, and tropical fruits—a tariff simply increases costs, and those costs need to be addressed somehow,” he said. “They might be partially absorbed by suppliers or manufacturers, but they don’t vanish.”
In light of rising expenses, Kim acknowledges that she may have to raise her prices, though she hasn’t determined a precise timetable. She has occasionally increased prices in response to other specific cost spikes, like eggs, but sees tariffs as a unique situation due to their widespread nature. Excessive price hikes, she warns, could deter customers.
“It’s like trying to juggle while someone throws a basketball at you,” she illustrated.
Kim has also noticed rising concern among her peers in the restaurant sector. At a recent chef conference, she observed that more than half of the attendees indicated they would need to adjust their pricing due to tariffs.
“I’m genuinely worried about the future of my industry,” Kim admitted. “Many are closing, or contemplating closure.”
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