For years, the food and beverage (F&B) industry has been caught in a storm of supply chain disruptions—pandemic bottlenecks, inflation, extreme weather, and raw material volatility. Now, a new wave of uncertainty is here. The US has threatened fresh tariffs—25% on Canada and Mexico, and 10% on China—impacting key imports like produce, seasonings, seafood, and packaging materials. These three nations are the backbone of America’s food supply, and while Canada and Mexico have secured a temporary 30-day delay, the long-term implications remain uncertain.

With the looming threat of a broader trade war, mounting labor shortages due to tightening immigration policies alongside demographic shifts, and rising bird flu cases putting additional strain on agriculture and livestock, food brands can’t afford to take a wait-and-see approach. To stay competitive, companies must rethink their sourcing strategies, diversify supplier networks, and leverage technology to evaluate cost trade-offs in real time. Those that embrace agility—powered by strong supplier relationships and intelligent sourcing tools—will be best positioned to navigate the turbulence ahead.

The tariff tangle: A shifting trade landscape 

The US food supply chain has always relied on a delicate balance of global trade, but the latest wave of tariffs threatens to upend that stability. The US imports around 17% of its food supply, with Canada and Mexico alone accounting for 42% of total F&B imports. Now, with steep tariffs potentially hitting these key trading partners, F&B companies are bracing for higher costs, supply chain bottlenecks, and potential shifts in consumer pricing.

The impact runs deep. Canada, a major supplier to the US, exported $4.2 billion in biscuits and wafers, $3.8 billion in rapeseed oil, and $2.6 billion in beef and beef variety meats in 2022. Mexico plays an equally critical role, shipping $5.95 billion in beer, $3.9 billion in fruits, $3.24 billion in vegetables, and $2.74 billion in tomatoes. Meanwhile, China, which exported $2.05 billion in seasonings and sauces and $518 million in spices, remains a key supplier of essential ingredients that add flavor and complexity to countless food products.

With tariffs threatening to drive up costs and impact availability, the potential ripple effects will be felt across the supply chain, from procurement teams managing tighter budgets to retailers navigating higher shelf prices. Packaging costs are also expected to climb, further complicating production timelines and margins. Meanwhile, the European Union is watching closely as tensions escalate. President Trump has hinted that the EU could be next in line for tariffs, though the UK may be spared, adding another layer of uncertainty to an already complex trade landscape.

For F&B brands, the real challenge involves more than weathering immediate price hikes—it requires staying nimble in an evolving global market. Here are a few key ways that F&B brands can navigate tariffs and shifting trade dynamics.

4 ways brands can adapt 

1. Don’t put all your eggs in one basket—diversify your suppliers

Relying too heavily on a limited network of suppliers, especially within one region, leaves brands vulnerable when trade policies shift. Tariffs can quickly drive up costs, disrupt ingredient availability, and create logistical headaches. While many companies have backup suppliers, they often operate within the same high-risk regions—meaning true diversification requires a more strategic approach. 

Expanding supplier networks doesn’t have to mean going global. In many cases, the best move is to look closer to home. Evaluating local and regional suppliers can help mitigate risk, reduce lead times, and offer more stability when global trade becomes unpredictable. But diversification isn’t just about geography—it’s also about agility. Do you have the infrastructure to source, vet, and onboard new suppliers quickly when needed? 

Shifting production or ingredient sourcing to less risky countries can reduce some import-related uncertainty. However, changing supply strategies efficiently requires the right tools. TraceGains streamlines supplier discovery and qualification, connecting brands with pre-vetted suppliers across 85,000+ locations. With AI-driven insights and real-time data, companies can quickly evaluate new suppliers and reduce the friction of making supply chain adjustments—turning disruption into opportunity.

2. Make smarter sourcing decisions with real-time data

With tariffs, potential retaliatory trade measures, and fluctuating costs reshaping the global trade landscape, F&B brands must be more agile than ever. Sourcing decisions are no longer just about finding the best price—they require balancing ingredient costs, transportation fees, environmental impact factors, and compliance risks while maintaining product quality and consumer trust. 

With sourcing teams already facing complex—and sometimes conflicting—requirements from stakeholders, it’s important to have access to the full scope of data needed to drive good sourcing decisions. A desirable product from one supplier may run afoul of sustainability goals, while another promising source may look good on paper, but have a poor track record of importation issues.  

A data-driven approach to sourcing helps companies stay ahead of market fluctuations. Instead of reacting to trade disruptions, brands can proactively adjust their strategies based on the latest insights. TraceGains’ AI-driven intelligent sourcing tools enable R&D and procurement teams to quickly evaluate ingredient alternatives, assess compliance risks, and weigh supplier performance against sustainability, safety, and quality objectives. This allows companies to pivot with confidence—ensuring they make smarter, faster sourcing decisions that protect margins and keep supply chains running smoothly.

3. Seize the shift in market trends and consumer demands

With a more merger-friendly regulatory environment on the horizon, investment in US food production is expected to rise. This could make domestic suppliers a smarter, tariff-proof choice for brands looking to mitigate risks and capitalize on shifting market dynamics. But beyond cost considerations, consumer demand is reshaping sourcing strategies in a major way. While different product portfolios will always require different sourcing strategies, there may be opportunities to leverage sourcing adjustments to create a competitive advantage.

Meet Consumer Demand for “Local”: Shoppers, especially those in premium markets, increasingly favor locally sourced ingredients, associating them with higher quality, freshness, and sustainability. This presents an opportunity for brands to differentiate their products and justify price adjustments in response to tariff-driven cost increases. Companies that proactively highlight local sourcing can gain a competitive edge while reducing import-related uncertainties. 

Align with ESG-Driven Buyers: Sustainability and transparency are no longer niche concerns—more consumers are actively prioritizing brands that align with their environmental and ethical values. Many are even willing to pay a premium for products with eco-friendly packaging and responsibly sourced ingredients. By seeking out low-impact ingredient alternatives and sustainable packaging solutions, brands can not only sidestep some tariffs but also strengthen their ESG position in a way that resonates with modern consumers. 

Navigating these evolving consumer expectations requires real-time insights into the environmental impact of supply chain decisions. Tools like TraceGains Sustainability Management provide brands with critical ESG data, making it easier to identify responsible suppliers and implement more sustainable sourcing practices without disrupting operations.

4. Find win-win strategies across the supply chain

Tariffs create pressure across the entire food and beverage supply chain, but brands don’t have to navigate these challenges alone. Instead of reacting in isolation, companies should take a proactive, collaborative approach—working with suppliers and retail partners to find trade investments and sourcing strategies that benefit everyone. 

Engaging key partners early allows brands to identify mutually beneficial solutions before tariffs disrupt operations. Whether it’s adjusting order volumes, renegotiating contracts, or reformulating products with alternative ingredients, open collaboration can lead to smarter, more cost-effective strategies. 

Strong supplier relationships built on transparency and trust ultimately means greater flexibility in times of uncertainty. By maintaining clear communication, brands may gain access to better pricing, alternative sourcing options, or temporary concessions to help weather tariff-related cost increases. 

During periods of policy or regulatory change, access to real-time supplier data and seamless communication is critical. Supplier Management platforms like TraceGains streamline document exchange and keep all stakeholders informed, ensuring brands can adapt quickly while maintaining compliance and supply chain efficiency.

Turning trade challenges into opportunities

Tariffs, commodity price shocks, and ingredient shortages will always have the potential to disrupt global supply chains, but they also present a chance for F&B brands to build stronger, more resilient operations. Rather than reacting to each policy shift as a crisis, companies that embrace supply chain modernization will gain a competitive edge. Investing in transparency, technology, and strategic partnerships ensures faster response times, fewer disruptions, and improved compliance—no matter how trade dynamics evolve. The key is agility—adapting not just to survive, but to thrive.

Want to see how TraceGains can help you navigate sourcing challenges? Request a demo today.