US Tariff Hike May Disrupt Global Spice Trade

11-Jul-2025 02:47 PM

Boston. The upcoming US tariff policy, set to take effect from August 1, 2025, is expected to significantly impact the global spice trade.

The Trump administration has announced an import duty of up to 50% on goods from over a dozen countries that lack a bilateral trade agreement or ongoing negotiations with the US. India is not on the list, but several major spice-exporting countries like Sri Lanka, Vietnam, Indonesia, and Brazil are expected to be affected.

The US already has a base import duty of 10%, which has raised costs for food manufacturers and ingredient suppliers. The new tariffs are likely to further increase the financial burden on importers, which could ultimately be passed on to consumers.

According to the American Spice Trade Association (AASTA), the US imported more than $2 billion worth of whole and value-added spice products in 2024 from over 50 countries. These imports include flavor-enhancing ingredients used extensively in processed food production.

Many of the spices under threat from the new policy are not commercially grown in the US. For example, black pepper is typically grown in tropical climates such as India, Sri Lanka, Vietnam, and Brazil. Similarly, vanilla is mainly produced in Madagascar, and cinnamon in Sri Lanka and Southeast Asia.

The AASTA warns that the new tariffs will inflate the cost of dozens of essential spices, potentially worsening food inflation. One spice company estimates its costs could rise by up to $90 million annually.

Smaller firms may struggle to remain viable, and some may be forced to shift toward artificial substitutes to stay competitive.