KANSAS CITY — Tariffs loomed large at the Sosland Purchasing Seminar, appearing in nearly all the 20-plus presentations at the event held June 8-10 in Kansas City. Presenters said tariff policy has been disruptive, adding considerable uncertainty for commodity and ingredient markets, food manufacturers and consumers.
Most speakers also said they thought the impact of tariffs so far was minimal or still a few months away, with some exceptions. What speakers were less clear about was the potential impact on pricing.
Many speakers said they thought the tariffs would be resolved in the next few months, or at most by the time of the mid-year elections in 2026, except for China for which they expect some level of tariffs to remain. Indications were that may be the case based on news June 11 that the United States and China had reached a tentative agreement that would leave cumulative 55% tariffs on US imports from China, 10% tariffs on US exports to China, Chinese rare earth minerals and magnet exports to the United States would continue and Chinese students could use US higher education institutions, all pending approval by the leaders of both countries.
Bill Lapp, president of Advanced Economic Solutions, noted limited impact on agricultural and food trade between the United States, Mexico and Canada as tariffs for most agricultural goods from the latter two countries have been exempted. He said reciprocal tariffs may lead to higher prices, but supplies would remain adequate. He also expects uncertainty has or will lead to slower consumer spending and reduced investment by businesses.
“It’s hard to say tariffs have been a big market mover as in 2018,” Lapp said.
Alex Norton, president of Beeson & Associates, Inc., said the trade war with China has the United States likely losing soybean export demand. China is the world’s largest soybean importer, Brazil is the world’s largest soybean exporter, and the United States is the second largest exporter with the lion’s share going to China.
Hugo van der Goes, senior vice president, commercial, at Blommer Chocolate Co., said the 10% tariffs that are expected to remain on US imports from most countries means cocoa products and cocoa bean exporters will favor Europe over the United States as a more favored export destination. Cocoa bean futures prices hit record highs earlier this year and remain historically high. All cocoa beans ground or cocoa products used in the United States are imported, mostly from West Africa.
“Tariffs are the big deal,” said Jim Ritchie, president and chief executive officer of RedStone Logistics, Olathe, Kans. “We don’t know what is going to happen. We can’t predict the future, but we can plan.”
The 10% tariffs expected to remain on US imports from most countries means cocoa products and cocoa bean exporters will favor Europe over the United States as a preferred export destination, according to Blommer’s Hugo van der Goes.
| Photo: ©KAISKYNET – STOCK.ADOBE.COMHe noted a sharp decrease in container volume originating in China, but sizable increases in volumes from elsewhere from February to March as they were able to replace the volume lost from China.
Lauren Jia, managing director at Macquarie Group, spoke on packaging at the Purchasing Seminar. She said the United States is a net PET importer, with Mexico the largest supplier and Canada the sixth largest, both of which have a tariff-free status under the United States-Mexico-Canada Agreement. Further, PET is exempt from the 10% universal tariffs. Imports from China are negligible because of existing antidumping duties.
Steel and aluminum may be greater concerns for packaging as the United States imports about 25% of steel and 50% of aluminum used overall, and the Trump administration has maintained a focus on those products. US steel imports from China, the world’s largest producer, are minimal because of 25% tariffs imposed in 2018. Most comes from Canada and Mexico. Most US aluminum imports come from Canada, with China a distant third.
At the consumer level, Sally Lyons Wyatt, global executive vice president and chief advisor, consumer goods and foodservice insights at Circana, said tariffs had impacted consumer confidence, but that so far there was no tariff impact on food and beverage prices at retail. She expects to see higher prices on food in the next three months, “if at all.” She sees earlier and greater impact on general merchandise.
While tariffs may have been part of most presentations and many sideline discussions, and the uncertainty caused by tariffs may have contributed to the record-high Purchasing Seminar registrations of nearly 900, most attendees still were focused on commodity and ingredient supplies and prices as well as the impact of weather on crops this growing season. The weather forecast, from Drew Lerner, senior meteorologist at World Weather, Inc., Overland Park, Kan., was one of the more benign outlooks in recent years for nearly all principal growing areas, not unlike what most expect will be the final outcome of tariffs at some point.
