Major packaged food makers including Quaker Oats and Folgers Coffee have asked US President Donald Trump for targeted exemptions from tariffs on imports like cocoa and fruit, according to a letter seen by Reuters.
PepsiCo, Conagra and JM Smucker are among the companies requesting that Trump exempt ingredients not available from US sources from high tariff charges.
The companies made this request in a bid to protect manufacturers who otherwise buy from domestic farmers and suppliers, according to the letter, which was sent on Monday by a consumer products trade group representing the companies, the Consumer Brands Association.
Coffee, oats, cocoa, spices, tropical fruit and tin mill steel – used for specialty food and household goods – are among the imports listed as unavailable domestically in the letter.
It said, “We believe (the) targeted and carefully calibrated removal of these ingredients and inputs from tariffs is appropriate to best protect US manufacturers and support (Trump’s) efforts to lower consumer inflation.”
PepsiCo and Smucker, which have executives sitting on the executive committee of the Consumer Brands Association, did not immediately respond to requests for comment.
A spokesman for Conagra – whose CEO Sean Connolly is also on the industry group’s executive committee – said the company continues to evaluate its sourcing in light of possible policy changes.
Tariffs
Trump’s new round of tariffs on goods from China, Canada and Mexico come at a delicate time for the US packaged food and consumer product industry.
Manufacturers fear having to pass new costs on to consumers, who are already buying less after double-digit inflation in the last several years.
Trump campaigned to bring down the cost of living.
Conversation
Tom Madrecki, vice president of campaigns and special products for the Consumer Brands Association, said the letter is aimed at opening up a conversation with the Trump administration on exemptions.
Madrecki said trade enforcement, including tariffs, has to be “done strategically and (it) has to ladder back up to protect manufacturers.”
He noted that bamboo fibre from Australia, used in absorbent pads for nappies, is another import not available domestically.
US companies including Colgate Palmolive and Edgewell face exposure to tariffs.
Colgate, which makes toothpaste in Mexico, is looking at ways to reduce the impact of tariffs.
However, the company doesn’t expect it will be able to fully mitigate them, its chief investor relations officer John Faucher said on Wednesday at an industry conference.
Faucher said, “There will still be an impact both from the initial tariff, as well as in terms of what happens with any sort of retaliatory tariffs as we look at impact with Mexico or Canada.”
Suncream-maker Edgewell said it was looking to lick in prices from Chinese suppliers on suncream chemicals ahead of tariffs.
Procter & Gamble also said it may have to raise prices to deal with the looming trade war.
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