How Will Donald Trump Affect Global Ingredient Sourcing?

Marc Ullman, Of Counsel, Rivkin Radler LLP
“A month into the Trump Administration, it still seems impossible to tell what U.S. trade policies will look like a year from now. We continue to hear conflicting messages concerning tariffs and the U.S. position on free trade generally and, of significant concern to the supplement industry, specifically in connection with China and other Asian markets. A major concern for the industry has to be the potential imposition of border taxes, tariffs, or customs duties, which will raise prices to companies importing ingredients and, eventually, consumers-which may in turn negatively impact an otherwise healthy (no pun intended), growing market.”

Vincent Tricarico, Vice President of Contract Manufacturing, NutraScience Labs
“Companies in the nutritional products industry will need to keep a close eye on the administration’s plans for imposing tariffs on imports. This is especially important for the sourcing of dietary ingredients, as many suppliers are overseas currently. It will be especially critical to see how the relationship with China plays out. Regardless, what this brings is an opportunity for companies who are investing in resources located in the United States and will bring more value to the “Made in the USA” brand. What we can be sure of is the importance of self-governance within the industry, as the new administration has promised to promote business by reducing unnecessary regulations. As an industry that must maintain trust with consumers, self-regulation to keep low-quality products made in sub-sufficient facilities will be imperative.”

Jeff Crowther, Executive Director, U.S.–China Health Products Association
“If President Trump decides to levy tariffs on Chinese ingredients, consumers will pay in the end. We would all like to see a more balanced trade policy on both sides of the Pacific, but currently there is not much of a balance. When Chinese ingredient companies export to America, there’s typically very little, if any, taxes imposed on their products. However, when U.S. companies use these ingredients to produce finished dietary supplements and then export to China, there are a variety of taxes, such as a 20% import tax and a 17% Value Added Tax.

Furthermore, prior to export, international companies must get supplements approved by China’s Food and Drug Administration, which costs approximately $150,000 per product and takes two to three years to complete. Does the above importing procedure comparison seem balanced? Of course not. As we can only speculate what President Trump will do, I can only suggest that the best solution would be to encourage China to lower their importing taxes and regulatory hurdles. This would be the best way to go as it would have less impact on consumers and be fair to both Chinese and American industry players.” 

George Pontiakos, President and CEO, BI Nutraceuticals
“Agriculture is a significant industry for the United States. The production from the United States feeds a great portion of the world. While American pickers and wildcrafters anticipate a constrained Department of Interior, EPA, etc., we feel that the overall impact of the Trump administration’s policies will be positive. We anticipate a renewed focus on small business and USA-based manufacturing. Overall, agriculture stands to benefit from this shift.”