The food industry has yet to feel the full impact of the Trump administration’s trade war, and stakeholders across the value chain should not confuse modest shelf price hikes with insulation from what is coming, even if new tariffs tied to the US president’s Greenland acquisition ambitions are delayed or revised, warn industry analysts.
When President Donald Trump unveiled a package of import duties targeting nearly every country last April 2, or what he dubbed ‘liberation day,’ he claimed foreign exporters would bear the brunt of the increases and that prices for US consumers would drop as domestic production picked up. Critics immediately countered that tariffs function as taxes and the end-user ultimately would pay the difference
The impact so far is somewhere in between, with many manufacturers and retailers employing a range of strategies to offset, delay or minimize price hikes where possible – but their ability to protect consumers from the full financial fallout of Trump’s tariffs is weakening as the trade war drags on and threatens to escalate, according to industry analysts.
If the current course holds – regardless of whether the US imposes an additional 10% fee on key European countries as part of the President’s efforts to acquire Greenland – CPG brands and grocery retailers likely will need to raise prices in mid- to late-2026, predict analysts with the market research firm Spins.
“In this coming year, we will start to see the impact of tariffs on consumer prices,” Ben Lerman, Spins VP of growth consulting, warned during the first of a two-part 2026 market report and trend predictions webinar.
He explained that despite the Trump administration’s start-and-stop tariff policy in 2025, the US “significantly increased the tariff cost or the tariff burden on importers” and that translated to notable additional costs for manufacturers and retailers.
Why haven’t liberation day tariffs hit the shelf yet?
Manufacturers and retailers so far have shielded consumers from most tariff-related costs through deliberate pricing or purchase discipline.
As a result, “we have a situation where prices are rising modestly across total grocery, and in some key categories where we would expect to see a lot of exposure to higher tariffs, prices are decelerating,” Lerman said.
For example, US steel and aluminum tariff revenue increased to an estimated $7.79 billion in fiscal year 2025 compared to $1.60 billion in fiscal year 2024. And yet the average retail price for canned soda – which ostensibly would be more expensive to produce because of tariffs on its packaging – increased only 4% in 52 weeks ending Nov. 30, according to Spins.
This was possible in part because manufacturers and retailers strategically spread tariff costs across their portfolios – raising prices of items with less exposure to tariffs to reduce the risk of sticker shock. For example, the average retail price of soda in plastic bottles also increased 4% in the same period even though the packaging was not impacted by as high of tariffs as tin and aluminum, Lerman said.
Brands and retailers also have held broader price hikes at bay by pulling back on shelf promotions, using them more selectively to manage price perception when needed, he added.
But, Lerman said, there is no denying grocery prices have risen in the past two years and that increase accelerated in the past year from 1.7% to 2.8%.
Grocery prices are at an inflection point
To better understand the long-term effects of tariffs on grocery prices and players, Lerman said Spins analyzed how the grocery supply chain has reacted to more traditional pricing pressures – such as from rising commodity costs.
“What we see for these high commodity categories is prices increase on a bit of a lag” of 12 to 18 months, he said.
This would place the fallout from the “liberation day” tariffs between April and October 2026.
So, “it is not that there was no impact from tariffs because we didn’t see consumer prices rise in 2025, it is just that they haven’t had time to flow through the system, yet. And it is in 2026, and potentially even late 2026, that we will start to see consumers feel a pinch of these higher tariffs,” he said.
For CPGs, the coming shift threatens not just pricing power but trade spending, promotional funding and already-compressed margins.
What changes when tariffs hit the shelf?
When price hikes related to liberation day tariffs finally hit, the consumers will be the “ultimate bearers of the burden,” according to a study published this week by an independent economic research institute based in Germany.
The Kiel Institut examined the impact of 2025 US tariffs and found exporters either raised prices to account for the fees or held prices steady but reduced shipments, resulting in a $200 billion increase in customs revenue that it said was a “tax paid almost entirely by Americans.”
This finding corroborates research by the Harvard Business School, Cato Institute and the Brookings Institution.
For food – especially value items that already have notoriously thin margins – many “retailers and manufacturers have limited room to absorb the hit,” and will pass through the costs in the form of price increases that disproportionately impact lower-income shoppers who buy value-priced items, industry expert Philip Lempert wrote this week in his new substack.
He also notes retailers and manufacturers may lean more on “quiet inflation,” including reformulating with lower-cost and -tier ingredients, shrinking pack sizes or pulling back even farther on discounts and promotions.
Retailers also may launch more US-made private label products positioned as a European- or Mediterranean-style – further compromising brands’ market share, he said.
He also warned if the threatened 10% “Greenland tariffs” go into effect Feb. 1 against Denmark, France, Germany, the Netherlands, the UK, Sweden, Norway and Finland, the categories hardest hit will be cheese and dairy specialties, olive oil, chocolate and specialty processed foods.
These shifts will further elevate the importance of brands and retailers conveying the value of products beyond price to justify any sustained hikes. They also could mean smaller producers will exit the US market, unable to absorb, offset or sufficiently pass on cost increases.
Uncertainty complicates corporate planning
The threat of retaliation against the US should it impose new tariffs likely would make corporate planning more difficult, predicts intelligence and productivity platform GlobalData.
“Tying tariffs to a territorial demand marks a sharp departure from conventional trade disputes, increasing the risk of retaliation and heightening uncertainty for companies with transatlantic supply chains, even if no change in Greenland’s status ultimately occurs,” Ramnivas Mundada, director, economic research and companies, GlobalData, said in a statement.
For example, the European Union has threatened a “trade bazooka” of roughly $107.7 billion in retaliatory tariffs on US goods should US tariffs take effect Feb. 1.
In this case, GlobalData says it expects “a higher probability of a tariff spiral in which initial measures trigger countermeasures, exemptions become bargaining chips and corporate planning becomes more difficult as trade rules shift under political pressure.”
Among the sectors it predicts having the “largest near-term exposure,” are consumer goods and especially premium products.
What CPG leaders should watch
As the newest front in the trade war opens and the impact from older attacks settle in, CPG manufacturers need to keep a close eye on how competitors rebalance marketing and promotions to see if they are pulling back on sales and discounts in favor of reinforcing brand loyalty and perceived product value.
At the retail level, there may be opportunities for domestic brands to take more shelf space as imports become too expensive or opt out of the US market.
Lobbying efforts by trade groups also could continue to reshape the landscape as some commodities or categories win exemptions from tariffs – giving them a potential pricing edge at a time when consumers likely will become even more budget-conscious.
Ultimately, stakeholders should acknowledge that avoidance of sharp price hikes so far is unlikely to hold and reflects timing, not immunity, and that the impact from tariffs likely will follow the same cost-shock playbook of commodity increases, only with the added variable of political volatility.
