As I write this, new U.S. tariff schedules for nearly 70 countries have just gone into effect. While some countries are still negotiating trade agreements with the Trump administration (meaning those tariffs could change), and not all industries and businesses are affected the same, depending on supply chains, any U.S. pet food company that imports ingredients or other raw materials or manufactures outside of the U.S. should understand the situation and how it impacts them. Do you?
The American Pet Products Association (APPA) has released a helpful video, “Navigating tariffs in a changing global landscape,” as part of its new Trade Talk series. The expert interviewed, Rebecca Rizzuti, owner of Progressive Trade Consulting, offered tips on what you should know and how to find the information you need.
For example, if a shipment was already on the water by today, the new or additional tariffs won’t go into effect on its contents until October 5, which could be after the shipment reaches U.S. shore, Rizzuti explained. In that case, most products will likely fall under previously announced reciprocal tariffs of 10%. You should work with your import brokers to determine what you have in transit and ensure you’re paying the right duties on those products, which could mean significant savings.
Classification of your products is key
During the interview, conducted by Patrick O’Brien, chief marketing officer for APPA, Rizzuti repeatedly stressed the need to know the classification of your products or imports in relation to the tariff schedules. “The basic foundation is really understanding your product, understanding the import requirements, then looking at those products [or their components] and assigning an appropriate classification,” she said.
“It’s critical now; some of the tariffs being put in place are actually relying on classification,” she continued, giving an example from the recently announced U.S.-European Union trade agreement. “We thought they were going to be hit with high tariffs across the board, and instead they have a split program; if you don’t know how your products are classified within that program, you don’t know what tariffs you should be paying,” she explained. (In the video, she goes into even more specifics for that example, at about the 8:20 mark.)
So, where do you start with this process, especially if you don’t have the expertise or knowledge in-house, as is the case for many smaller or mid-size companies? Again, it starts with classification, Rizzuti repeated. “Something as simple as having a list of all your products and their components and basic descriptions; pictures and images are very important,” she said.
Also, you must understand how the products will be used as well as the manufacturing process. “What countries are you manufacturing the products in, since there could be multiple sources, or the product itself could be moving through a supply chain through multiple countries.” (For pet food manufacturers, that likely applies mostly to ingredients or packaging materials.) Having all that information together will help you get a complete picture, as well as be able to have a beneficial discussion with a trade expert. “That will move this process along pretty quickly,” Rizzuti added.
Then, she recommended taking your products and grouping them, perhaps into like items. “What we’re trying to do is to get everybody to really understand their supply chain, map out their product space and then look at where their risk levels are.”
Where to turn for expertise and guidance
It’s critical to note that lack of knowledge is not an excuse, Rizzuti pointed out. Regardless of the new schedules, this tariff environment has been in effect all year (and import requirements are certainly nothing new), so importers should know the rules and regulations. “You won’t get a reprieve if you say you didn’t know that or didn’t have the skill set internally because it’s really your responsibility to have all that as an importer into the U.S.”
So, if your company doesn’t have that skill set or internal expertise, where can you turn? “Reach out to your brokers,” Rizzuti advised, or to a trade compliance team if you’re already engaged with one. “There are also opportunities for you to work directly with U.S. Customs; they offer tools. So if you don’t have that education in house, it’s really time for you to start building that skill set.”
Besides its Trade Talks video series, APPA is also offering accessibility to experts like Rizzuti through another new feature called Office Hours. (APPA membership may be required to participate in the Office Hours; the videos are available to anyone if you register to view them.)
Rizzuti also advised bookmarking websites like WhiteHouse.gov (all the executive orders related to tariffs and trade are posted there) and CBP.gov, the Customs and Border Protection agency site. Interestingly, she said she also spends a lot of time on Truth Social monitoring President Trump’s account, because he posts about new agreements and orders almost instantaneously, often days before the official notifications. “Not that it’s final gospel until you see the official notification, but you can see what’s on the horizon,” she explained.
The Brazil situation
Rizzuti mentioned the high level of tariffs, 50%, now imposed on imports from Brazil. While she said not many pet products were affected, that’s definitely not the case for Brazilian pet food manufacturers who import into the U.S.; any exemptions within the new tariff policy do not include pet food. Abinpet, the pet products association in Brazil, issued a statement to its members on August 6 describing the “very difficult and unviable conditions” created by the new tariffs.
This is a global industry; and with Brazil’s standing as the second largest producer (by volume) of pet food worldwide, the policy has implications for the global market and competitive landscape. Those implications have yet to be seen; and perhaps Brazil will be able to negotiate a lower tariff level and more palatable trade agreement with the Trump administration. In the meantime, pet food could be in for a rocky ride.
