How Tariffs Are Raising Food Prices in 2025: What Bakeries, Caterers, and Food Producers Need to Know

Imagine you’re placing your weekly bulk order, only to spot prices on some ingredients that make you do a double take. Sugar is up. Cocoa is edging higher. Canned fruits, imported oils, and packaging components all seem just a little more expensive than last time. The culprit? A fresh wave of U.S. tariffs that’s quietly impacting the backbone of the food industry—especially businesses that rely on bulk goods and stable pricing.

Tariffs may sound like something that only affects trade wars and global headlines. But in 2025, they’re hitting closer to home than many expected, pushing up the cost of both consumer and investment goods. Here’s what food businesses need to know, including which categories are affected most and why prices may continue rising in the months ahead.

A tariff is a tax placed on goods imported from other countries. Governments use tariffs to protect local industries or retaliate in trade disputes. While the policy itself is implemented at the national level, the costs often ripple down to the people and businesses who buy or depend on those imported goods.

In 2025, the United States has enacted a broad set of import tariffs—some across the board, others targeted by country or product category. These include tariffs on goods from Mexico, China, the European Union, and more. Although the exact categories vary, many of them hit ingredients, equipment, and packaging used every day by commercial kitchens, bakeries, and food processors.

According to economists at the Federal Reserve Bank of San Francisco, a uniform 25% tariff could raise consumer food prices by about 2.2%. But that’s only part of the story. Equipment and investment goods—like ovens, mixers, and industrial fridges—could see a 9.5% increase. That’s nearly five times the impact on food ingredients, making this a double hit for any food business looking to expand or upgrade.

In other words:

• Your next ingredient order might cost a bit more
  
  

• Your next capital purchase could cost a lot more
  
  

The result is tighter margins and bigger financial decisions for operators across the food sector.

Most shoppers assume imported goods dominate the shelves. But the U.S. is still a mostly domestic economy. In fact, only about 9% of consumer food spending is tied directly to imported ingredients. So why are food businesses feeling the squeeze?

Here’s why:

1. Imported inputs matter more than you think : Many "Made in USA" products still contain imported parts or ingredients. That includes cocoa beans, certain sweeteners, processed fruit, and oils.
   
   

2. Retail prices include markups : Tariffs don’t just apply to the raw cost of the good. Shipping, warehousing, and retail markups magnify the effect.
   
   

3. Bulk buyers feel it first : A 5% cost increase on a pallet of sugar is a bigger hit than a few extra cents on a grocery shelf.

Let’s break down a few product categories where tariffs are likely to push up costs for food manufacturers and commercial kitchens.

Much of the world’s cocoa is imported from West Africa and South America. While those regions may not always be the target of direct tariffs, logistics and re-exporting practices mean cocoa may still be impacted—especially once processed into baking chocolate, syrups, or flavored fillings.

Many canned fruits and processed ingredients come from countries like China and Mexico. That includes pineapple, mango, peaches, and tomato-based products used in sauces and fillings. A tariff on these imports increases the cost for any food business making jams, tarts, pastries, and marinades.

Vanilla, cinnamon, and specialty spices often originate outside the U.S. If tariffs hit EU or Asian suppliers, food companies that rely on signature flavors may see their ingredient costs rise.

Palm, coconut, and sunflower oils are widely imported. Tariffs on Southeast Asian or EU imports will impact bulk orders of frying oils and emulsifiers.

Though the U.S. grows wheat and corn in abundance, specialty grains like basmati rice, quinoa, or semolina pasta ingredients often come from abroad. These are staple goods for manufacturers producing artisan pastas, grain mixes, or ethnic cuisines.

Tuna, sardines, anchovies, and other canned or frozen fish products are largely imported. Tariffs raise prices for items used in catering, delis, and prepared salads.

Many specialty cheeses (like Parmigiano-Reggiano or Manchego) and ingredients like milk powder or European-style butter are imported and subject to tariffs. These affect costs for bakeries and food manufacturers alike.

Most commercial coffee beans and tea leaves are grown in regions now impacted by trade measures. Higher tariffs mean increased costs for cafes and packaged beverage manufacturers.

Ingredients like agave syrup, glucose syrup, and imported sugar are often sourced from Mexico and South America. Tariffs affect everything from candies and baked goods to beverages.

While not edible, the packaging materials (tin cans, glass jars, plastic pouches) often come from overseas. Tariffs on these can raise the overall cost of any shelf-stable or pre-packed product.

Bakeries and production facilities don’t just use food—they need reliable equipment. The Fed estimates that 38% of production equipment includes import content. That includes parts, assemblies, and finished goods.

So if you were planning to:

• Replace an oven or dough mixer
  
  

• Upgrade a filling machine
  
  

• Install energy-efficient refrigeration
  ...you might be looking at nearly 10% higher prices than just a year ago.

This doesn’t just affect new businesses—it delays growth plans, disrupts renovation timelines, and may even stall factory automation projects. Long term, that limits how fast food businesses can scale.

Food companies are no strangers to cost fluctuations, but tariffs introduce a unique layer of unpredictability. Here’s how many are adjusting:

Some operators are sourcing from alternative regions not hit by tariffs. While it doesn’t always solve the problem, diversifying sources can help hedge against future cost jumps.

Reformulation is nothing new. Businesses are adjusting recipes to rely less on high-risk ingredients. That could mean reducing imported fruit toppings, shifting from foreign oils to domestic ones, or replacing spices with local blends.

Bulk buyers are negotiating long-term supplier contracts now to hold current prices before tariffs widen the gap further. Even a three-month lock-in can offer stability during tariff negotiations.

Many bakeries and manufacturers are pausing major equipment buys, hoping tariffs subside. While not ideal, deferring upgrades may offer some protection against peak pricing.

It’s too soon to say. Tariffs can change with elections, trade talks, or economic retaliation. The FRBSF (Federal Reserve Bank of San Francisco) notes that the full impact depends on whether domestic companies absorb some costs or pass them directly to buyers.

There’s also the risk that more tariffs are coming. If other countries respond with tariffs of their own, reimported goods could see double taxation. That affects everything from canned peaches to imported packaging components.

In short: While prices might stabilize eventually, don’t count on it happening in 2025 . Smart planning is the safer bet.

Tariffs may feel like distant policy moves, but they’re already hitting bakeries, catering kitchens, and food production lines where it hurts: the budget. Whether it’s the cost of imported mango puree or the price tag on your next industrial dough sheeter, trade policy is becoming a day-to-day challenge for food operators.

At Baker’s Authority, we understand what rising costs mean for your business. That’s why we offer a wide range of domestic and imported bulk ingredients—plus expert support to help you manage cost swings and inventory planning.

Have questions about ingredient sourcing or bulk contract pricing? Reach out to us anytime. We’re here to help you keep baking, producing, and growing—even in a tariff-tight market.