New U.S. Tariffs and Their Impact on the Spice Industry
Tariffs affect global trade and, for U.S. businesses in the spice industry, can change how they operate and plan for the future. With the U.S. heavily reliant on imported spices, even small policy changes can impact costs, supply, and sourcing decisions.
The Current Status of Tariffs
The U.S. government has announced that Mexican imports will remain tariff-free for at least one more month. This ensures short-term stability for spices like chilies, cumin, and oregano, which are key exports from Mexico. However, the situation could change, and businesses should stay alert to future updates.
Meanwhile, tariffs on imports from Canada and China continue:
- Canada: Agricultural products from Canada generally remain tariff-free under the USMCA. However, processed foods and some industrial goods face higher duties.
- China: Tariffs ranging from 10-25% are still in place for Chinese imports, including garlic, ginger, and star anise. For instance:
- Garlic imports from China, which are valued at around $100 million annually, carry a 25% tariff.
- Ginger imports from China, a key product for the U.S. market, face similar high tariffs, impacting costs for importers.
How Tariffs Impact the Spice Industry
The U.S. imported $364 million worth of spices in 2022 from countries including India, Vietnam, China, Mexico, and Peru. Here’s how tariffs are creating challenges:
- Higher Costs for Certain Imports:
Tariffs on Chinese products mean spices like garlic and ginger are becoming more expensive. Importers are seeing a 15-20% increase in costs, which affects retailers and food manufacturers. - Shifting Suppliers:
Some businesses are looking to India and Egypt for garlic or sourcing ginger from Peru to avoid the higher costs from China. While this strategy helps mitigate expenses, it can come with risks such as inconsistent quality or delays. - Planning for Uncertainty:
Businesses relying on Mexican spices can plan for another month without added costs, but the uncertainty of future policies means companies must stay prepared for sudden changes.
Steps for Businesses
For spice importers and sellers, preparation is key. Here’s what you can do to adapt:
- Diversify Supply Chains: Look for additional suppliers in countries with favorable trade terms to reduce risk.
- Secure Contracts: Lock in pricing agreements with vendors to shield yourself from sudden cost increases.
- Stay Updated: Follow tariff news closely to make timely adjustments to your strategy.
While Mexican imports are tariff-free for now, businesses should remain proactive in managing costs and securing reliable supply chains.
References
- The Office of the United States Trade Representative. (2025). USMCA Overview. Retrieved from https://ustr.gov/usmca
- The Observatory of Economic Complexity. (2022). U.S. spice imports by country. Retrieved from https://oec.world
- The White House. (2025). Fact Sheet: Tariffs on imports from Canada, Mexico, and China. Retrieved from https://whitehouse.gov
- USDA Economic Research Service. (2022). Impact of Tariffs on Agricultural Trade. Retrieved from https://ers.usda.gov