Tariffs, Trade Wars, and the Two-Speed Food Industry

I’ve had a string of conversations recently with senior leaders across the food and food ingredients sector, in the US, in Europe, and across Latin America - and every single one has touched on the same subject. 

Tariffs. 

Trade policy. 

What it means. 

What it doesn’t mean. 

And, crucially, what to actually do about it.

What’s struck me most isn’t the anxiety felt by those people I speak to. 

That’s understandable. 

It’s the divergence. 

I’m speaking with leaders at businesses in the same sector, sometimes in the same product category, who are having completely different experiences. 

Some are genuinely optimistic. 

Others are scrambling. 

The difference isn’t luck. It’s structural, and it’s creating a two-speed food industry that I think will define the competitive landscape for years to come.

Two companies, two realities

In one conversation, a US-based commercial leader told me that tariffs had actually been a tailwind for their business. With restrictions tightening on imports, domestic customers were turning to them for supply they’d previously sourced internationally.

 Their pipeline was growing. Their pricing power had strengthened. They were hiring.

A week later, I spoke with a senior executive at an ingredients business where over half of revenue came from export markets. The picture couldn’t have been more different. 

Reciprocal tariffs from trading partners were making their products less competitive overseas. 

Key accounts were exploring local alternatives. 

The growth projections they’d built their business plan around were starting to look optimistic at best.

Same sector. 

Same trade policy. 

Opposite outcomes. 

And that’s the part of this story that doesn’t get enough attention.

The headline versus the reality

The political narrative around tariffs is binary: they’re either protecting American industry or they’re a tax on consumers. 

The reality on the ground in food and ingredients is far more nuanced, and it depends almost entirely on where your business sits in the supply chain and which direction your products travel.

If you’re a domestically focused manufacturer using predominantly US-sourced inputs, the current environment can genuinely work in your favour. 

Import duties make foreign competitors more expensive. 

The “Made in USA” positioning carries weight with both consumers and retailers. 

And if tariff-driven cost increases hit your competitors harder than they hit you, you’ve got a window of pricing advantage that didn’t exist two years ago.

But if you’re an ingredients business that exports significantly and plenty do, particularly into Latin America, Asia, and Europe, the calculus is completely different. 

Retaliatory tariffs are real. 

Trade partners aren’t absorbing costs indefinitely. 

And the customers you’ve spent years cultivating in overseas markets are, quite rationally, looking for suppliers closer to home who don’t carry a tariff surcharge.

The leaders I’m speaking with aren’t asking whether tariffs matter. 

They’re asking which version of the tariff story they’re living in - and whether their leadership teams are being honest about the answer.

The hidden cost nobody’s quoting

Here’s something I keep hearing in these conversations that rarely makes it into the trade press coverage. 

The headline tariff rate - 10%, 25%, whatever the number, is only part of the story. 

The real cost is the operational friction that sits underneath it.

When tariffs hit a specific ingredient category, the impact shows up in three places. 

First, the direct surcharge on the tariffed import. 

Second, the price increase from domestic and alternative suppliers who know their competition just became more expensive, and adjust their own pricing accordingly. 

And third, the operational cost of managing it all: origin changes, new supplier qualifications, dual-source inventory, contract renegotiation, reformulation work.

One procurement leader put it to me bluntly: the real cost of tariffs in their business was running at roughly two to three times the headline rate when you accounted for everything. 

That’s a number that changes how you think about margin, pricing, and investment planning and it’s a number that plenty of boards aren’t seeing because it’s buried across multiple line items.

The talent and leadership dimension

What interests me most about this, and where it connects directly to the work I do every day, is the leadership question. Because the businesses navigating this environment well aren’t necessarily the ones with the lowest tariff exposure. 

They’re the ones with leaders who saw this coming and built flexibility into their operations before they needed it.

That means having commercial leaders who understand global sourcing, not just domestic sales. It means having supply chain thinkers on the leadership team, not just in the operations function. It means having the strategic confidence to invest in dual sourcing and geographic diversification when the ROI isn’t immediate and the board is focused on this quarter’s numbers.

In my conversations with PE-backed food businesses in particular, I’m seeing a real tension here. 

The investment thesis often assumes a certain growth trajectory. 

When tariffs disrupt that trajectory, either by inflating input costs or by closing off export markets, the pressure to sell harder into the domestic market intensifies. 

But selling harder isn’t a strategy. 

It’s a reflex. 

And the businesses that mistake one for the other are the ones that will find themselves exposed when the next trade policy shift comes - which it will.

What the smart operators are doing

The leaders I’m most impressed by right now are the ones treating this moment as a catalyst for strategic clarity rather than just a cost problem to manage.

They’re mapping their supply chain vulnerabilities properly, not just the first-order tariff exposure, but the second and third-order effects. 

They’re building sourcing redundancy that gives them options when trade policy shifts, rather than scrambling to react after the fact. They’re investing in domestic manufacturing capability where it makes genuine strategic sense, not as a knee-jerk response to political rhetoric.

And critically, they’re bringing people into their leadership teams who have genuine international experience - leaders who understand how global food trade actually works, who have relationships across multiple geographies, and who can navigate the complexity of operating in a world where the rules of trade are changing faster than most businesses can adapt.

That last point is one I feel strongly about. 

The food ingredients sector has always been a global business. 

The idea that tariffs will somehow make it a purely domestic one is a fantasy. 

What they will do is make it a more complex, more nuanced, and more strategically demanding one. And that requires a different caliber of leadership than many businesses currently have in place.

The question I’d ask your board

If you’re leading a food or ingredients business right now, here’s the question I’d put to your next board meeting…

Are we a tariff winner or a tariff loser? 

And, do we actually know, or are we guessing?

Because the honest answer for most businesses is: it depends. 

It depends on which products, which trade corridors, which customers, and which time horizon you’re looking at. The companies that will emerge strongest from this period of trade volatility are the ones that can answer that question with specificity - product by product, market by market, and build their strategy around reality rather than the hope.

The tariff story in food isn’t a simple one. 

It’s not heroes and villains, winners and losers in neat categories. 

It’s a two-speed industry, and which speed you’re operating at depends on decisions that were made, or weren’t made, long before the tariffs were announced. 

The leaders who understood that early are the ones sleeping better tonight.

For the rest, it’s not too late. 

But the window for strategic repositioning is narrower than most people think.

If tariffs, trade volatility, or supply chain complexity are exposing leadership gaps in your business - I'd be happy to have a confidential conversation about where stronger senior capability could make the biggest impact.

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This is part of my “Behind the Scenes” series, where I share insights from conversations with the leaders, founders, and operators shaping the future of food. If something here resonated, I’d love to hear your perspective.

Mike Meyrick is Co-Leader of COREangels Food, and Managing Director of Meyrick Consulting, an international executive search firm operating across the food and food ingredients sector.