Standing in the aisle of my local Mariano’s this week, I stopped to wonder when Modest Mouse became grocery store music — a reminder of time passing, and therefore my own frail mortality — and picked up a six-pack of sparkling water. The price tag caught my eye, higher than I remembered it being just a few weeks ago.
Now, with tariffs set to go into effect next week, the company behind those cans is likely scrambling to figure out how not to raise prices even further.
American consumers are already grappling with inflation and rising ingredient costs—from the impact of avian flu on the egg supply to the doubling of international cocoa and coffee prices due to extreme weather. And according to experts, President Donald Trump’s proposed tariffs — 25% on imports from Mexico and Canada, and an additional 10% on goods from China — could significantly impact U.S. food prices, adding yet another layer of financial strain.
The administration hasn’t provided much clarity on how long the tariffs will remain in effect, but big food companies are bracing for what’s to come, with ingredients like Canadian rapeseed oil, seafood and even aluminum facing steep price hikes. As these companies decide whether to absorb or pass on the added costs, American shoppers will inevitably feel the impact.
Big food companies are preparing for price increases
For many food companies, the looming tariffs are a hurdle—but one for which they’ve been preparing. As reported by Food Dive, Sean Connolly, CEO of Conagra Brands, which makes products like Slim Jim and Healthy Choice, said at the Consumer Analyst Group of New York’s annual conference that there are still plenty of questions, but “not a lot of answers.”
"But,” as Connolly put it, “As managers of the business, we are always contingency planning for an array of possible outcomes to navigate any curveballs that come our way. This is no different.”
While some beverage manufacturers were exempt from tariff penalties during Trump’s first term, President Trump has made it clear that tariffs imposed during his second term will be enforced “without exceptions or exemptions.” This means companies like Coca-Cola—whose CEO, James Quincey, noted that they import aluminum for cans from Canada—are scrambling to find ways to offset potential price hikes.
In an earnings call earlier this month, Quincey reminded investors that while packaging makes up only a small portion of Coca-Cola's overall costs, the company is prepared to shift to plastic bottles if necessary to avoid absorbing the price hike on aluminum cans.
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“We’re in danger of exaggerating the impact of the 25% aluminum price increase relative to the total system,” Quincey said. “It’s not insignificant, but it’s not going to radically change a multibillion-dollar U.S. business, and packaging is only a small component of the total cost structure.”
He continued, “If one package faces an increase in input costs, we have other packaging options that will allow us to stay competitive on affordability. For example, if aluminum cans get more expensive, we can increase emphasis on PET [plastic] bottles.”
But it’s not just consumer packaged goods companies feeling the pressure. Diageo, the world’s largest spirits company, has also been bracing for the impact. The company warned that tariffs on goods imported from Mexico and Canada could reduce its operating profit by up to $200 million. CEO Debra Crew said this could derail the company’s recent growth, despite strong fiscal 2025 results
“Diageo has anticipated and planned for a number of potential scenarios regarding tariffs in recent months. The confirmation at the weekend of the implementation of tariffs in the US, whilst anticipated, could very well impact this building momentum,” Crew said in a call with investors. “It also adds further complexity in our ability to provide updated forward guidance given this is a new and dynamic situation. We are taking a number of actions to mitigate the impact and disruption to our business that tariffs may cause, and we will also continue to engage with the US administration on the broader impact that this will have on everyone supporting the US hospitality industry, including consumers, employees, distributors, restaurants, bars and other retail outlets.”
Uncertainty among CEOs and retailers
It’s not just the companies themselves that are concerned. Jeffrey Sonnenfeld, a professor at the Yale School of Management, commented on the confusion felt by leaders across industries: "All CEOs are bewildered by these non-strategic tariff tantrums being directed at our closest allies instead of adversaries," Sonnenfeld told Reuters.
The National Retail Federation (NRF) echoed this concern, urging the White House to explore alternative ways to achieve its policy goals without imposing tariffs that would increase prices on everyday consumer goods. As NRF Executive Vice President David French said, “As long as these universal tariffs are in place, Americans will be forced to pay higher prices on everyday consumer goods.”
These tariffs aren’t just a corporate issue — they’re a household one. According to a 2024 report from Trace One, which helps businesses manage food industry compliance and supply chain regulations, U.S. food prices are at risk of climbing even higher due to these new tariffs. With U.S. imports from Mexico, Canada, and China accounting for nearly half of the food and beverage products consumed in the U.S., the effects will be widespread.
"These tariffs aren’t just a corporate issue — they’re a household one."
“Certain categories, like fruits, nuts and seafood, have become particularly reliant on foreign supply,” said the report. “Nearly 60% of fruits and nuts consumed in the U.S. now come from abroad, compared to just 35.8% in 2008. Similarly, imported milled grains and oils now make up 57.4% of U.S. consumption, while sweeteners and vegetables also see high import dependency.”
If the tariffs go forward, everyday staples like these could see price hikes, making it even harder for U.S. households to afford nutritious food.
The effect of the tariffs will vary by region, as some states depend more heavily on specific imports. In Illinois, for example, beer and coffee are top imports, while other states may face rising prices for beef, canola oil or prepared foods. The diversity of U.S. food imports means the impact will be felt differently across the country, but it’s clear that no one will be entirely insulated from the price hikes — especially as leaders in Mexico and Canada are prepared to retaliate if necessary.
As the Associated Press reported, Doug Ford, the premier of Ontario, has promised to retaliate by removing American alcohol from store shelves across the province—a move that carries weight, given that Canada is the second-largest market for U.S. distilled spirits, behind only the European Union.
Meanwhile, Mexican President Claudia Sheinbaum told reporters earlier this month “we shouldn’t see ourselves as competitors,” referring to the country’s trade relationship with the United States. However, she noted that Mexico is ready to respond if the U.S. follows through with tariffs, having prepared for such a scenario in recent months.
“Now it is very important that the Mexican people know that we are always going to defend the dignity of our people, we are always going to defend the respect of our sovereignty and a dialogue between equals, as we have always said, without subordination,” Sheinbaum said.
What’s next for consumers?
With food prices already on the rise, the introduction of tariffs will only increase the strain on American consumers.
Nearly 28% of U.S. adults report difficulty affording food, and 13.5% of households are food insecure. As tariffs take effect, the question remains: Will consumers feel the full weight of this trade war in their grocery carts? It’s up to companies, retailers and policymakers to chart a course that minimizes harm — but one thing is clear: The grocery store aisle is about to look a lot different.
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