The Shift in Trade Policy and Its Impacts on FMCG and FMCD Imports

As the global trade landscape continues to evolve in 2025, the resurgence of Donald Trump’s tariff-centric trade policies is creating significant ripples across various industries, especially within the Fast-Moving Consumer Goods (FMCG) and Fast-Moving Consumer Durables (FMCD) sectors. These industries, which are highly reliant on international trade, face a unique set of challenges brought about by the reintroduction of tariffs, shifts in global supply chains, and changing consumer dynamics. Let’s find out what MarketGenics research says on the subject.

During Trump’s presidency, the “America First” trade doctrine fundamentally altered the United States’ approach to global trade. His administration’s aggressive stance on tariffs, particularly with China, aimed to reduce the U.S. trade deficit, protect domestic industries, and reduce reliance on foreign manufacturing. While these policies were initially designed to bolster American manufacturing and create more local jobs, they also created significant barriers to global commerce, which had a direct impact on companies that depended on international imports.

For FMCG companies—ranging from food and beverage producers to cleaning products and toiletries—the re-imposition of tariffs on key raw materials, packaging components, and finished goods from countries like China, Vietnam, and Mexico introduces a new level of complexity. Similarly, FMCD companies that rely on global supply chains for components like semiconductors, lithium-ion batteries, and other electronic parts are now facing escalating production costs, delayed shipments, and squeezed margins.

The potential revival of these tariff policies in 2025 poses a pivotal question for industry leaders: How will they adapt to a landscape where tariffs are once again shaping the cost structure, sourcing strategies, and pricing models? This article delves into the implications of Trump’s tariffs for the FMCG and FMCD sectors, exploring their immediate effects on supply chains, consumer prices, and industry growth projections. We’ll also examine the potential long-term consequences of protectionist trade policies and how businesses can strategically navigate this new reality.

Understanding Trump’s Tariff Legacy

A tariff is essentially a tax imposed on imports. Trump’s trade policies in his previous term were characterized by aggressive tariff strategies—especially targeting China, with tariffs on over $370 billion worth of goods. In 2025, he is reviving similar moves, aiming to impose or increase tariffs up to 60% on Chinese imports. The rationale: protect American industries, reduce trade deficits, and promote local manufacturing. However, for global FMCG and FMCD players, these protectionist policies come with consequences.

Trump’s tariff policies were marked by aggressive actions such as:

• Tariffs on Steel and Aluminum: Aimed at protecting U.S. steel and aluminum industries, these tariffs increased the cost of raw materials crucial for packaging and appliance production.
• China-Specific Tariffs: Over $370 billion in tariffs were imposed on Chinese imports, including electronics, machinery, and even food-related products, directly affecting FMCG goods and consumer durables that relied on Chinese components or finished goods.
• Retaliatory Tariffs: As other nations responded with retaliatory tariffs, U.S. exports faced increased costs, which further complicated global trade dynamics.

Fast forward to 2025, and these policies have found new resonance. Despite changes in leadership, Trump’s protectionist stance continues to influence the trade conversation, particularly as concerns over domestic job creation and supply chain vulnerabilities persist. The potential resurgence of tariffs on imports like electronics, raw materials, and packaging continues to impact companies that rely heavily on imports. In this climate, businesses are rethinking their sourcing strategies and adapting to the costs imposed by these tariffs.

As the trade environment remains unpredictable, companies must be prepared for fluctuating tariffs and explore strategies like reshoring, supplier diversification, and advanced data analytics to stay competitive. The legacy of Trump’s tariff policies continues to shape the U.S. trade landscape, with lasting effects on key industries such as FMCG and FMCD.

FMCG Sector: Price Sensitivity Meets Import Dependency

The FMCG industry includes daily-use consumer products like packaged food, beverages, toiletries, and cleaning agents. A large portion of raw materials, ingredients, and packaging materials for these goods are imported.

Key Impacts:

• Cost Inflation: Tariffs on inputs like palm oil, aluminum foil, and plastic polymers from China and Southeast Asia are raising manufacturing costs.
• Higher Consumer Prices: These costs are passed on to end users, which may reduce demand for discretionary items.
• Shifting Sourcing Strategies: Many FMCG companies are pivoting to alternative suppliers from India, Vietnam, or Mexico to reduce reliance on high-tariff countries.

“Tariffs introduce uncertainty into pricing models. It’s no longer just about what consumers want, but what they can afford,” says Dr. Lisa McDermott, Trade Policy Fellow, U.S. Department of Commerce.

FMCD Sector: Supply Chain Strain and Margin Pressures

FMCD includes electronics, appliances, gadgets, and other durable goods. These products rely on complex international supply chains, involving parts like lithium-ion batteries, semiconductors, and display panels.

Key Impacts:

• Production Delays: Import taxes on components like semiconductors could disrupt manufacturing schedules.
• Squeezed Margins: Companies like LG, Samsung, and Apple (which import components or assemble abroad) face narrower profit margins.
• Consumer Spending Pressure: As product prices rise, consumer demand for high-value goods may weaken, especially in inflation-sensitive markets.

As per Market Genics research, consumer electronics imports exceeded $592 billion in 2023, which can represent about 19.2 % of all U.S. imports. The reintroduction of tariffs may slow down this growth trajectory.

Brief Pointers: Trump’s Tariff Impact on the Industry

• Steel and aluminum tariffs raise the cost of packaging and appliances.
• China-specific tariffs affect electronics, packaging, and intermediate goods.
• Retaliatory tariffs by other nations may reduce U.S. export opportunities, squeezing global market share.
• Logistical challenges from diversifying suppliers increase operational complexity.

Market Overview and Projections

• FMCG Market: According to Market Genics, the global FMCG market is projected to grow around $4.94 trillion by 2026, at a CAGR of around 5.4 % and around $ 7.5 trillion by 2033, exhibiting a Compound Annual Growth Rate (CAGR) of around 5.4% during the forecast period.
• FMCD Market: According to Market Genics, the FMCD market is projected to grow around $1.2 trillion by 2026, with a CAGR of around3 % from 2024 to 2033.

Global Import Context (U.S. Market)

 U.S. Imports from China (Pre-Tariff Expansion)

• FMCG-related imports (2023): Over USD 120 billion in consumer goods.
• FMCD-related imports (2023): Estimated Around USD 427 billion. Electrical machinery, computers, and related electronics accounted for more than $150 billion.

These figures highlight robust potential but suggest caution. Trade disruptions may force companies to temper growth projections if tariffs inflate costs or hinder product availability.

Company-Level Adaptations

To mitigate the negative impact of trade tariffs, FMCG and FMCD companies are adopting strategic shifts:

• Nearshoring and Reshoring: Brands like Procter & Gamble and Whirlpool are expanding domestic production to reduce import exposure.
• Supplier Diversification: Multinational firms are now sourcing from tariff-neutral countries like Vietnam and Mexico.
• Tech-Enabled Forecasting: Enhanced data analytics are helping companies model different tariff scenarios and adjust pricing dynamically.

“Tariffs force us to become leaner and smarter. Resilience in sourcing is now a competitive advantage,” notes Craig Franklin, VP of Supply Chain, Unilever North America.

Industry and Government Response

Industry groups such as the U.S. Chamber of Commerce and the National Retail Federation have raised concerns about long-term competitiveness under a protectionist model. The Office of the U.S. Trade Representative (USTR) has also highlighted the importance of balancing domestic industry protection with global trade commitments.

According to the USTR’s 2024 Trade Policy Agenda, the focus is on “supporting supply chain resilience, expanding market access, and reducing burdens on American consumers.”

Meanwhile, the U.S. Department of Commerce has launched targeted support for domestic manufacturers affected by retaliatory tariffs and has introduced incentive programs for companies investing in local supply chains. Tax credits and subsidies are being offered for capital expenditures related to factory relocations and expansions within the U.S.

State-level programs in manufacturing-heavy regions such as Michigan, Ohio, and Texas have also ramped up grants and training programs aimed at filling gaps in skilled labor—essential for any potential reshoring strategies.

These measures demonstrate a dual effort: protecting domestic industries while trying to mitigate consumer cost burdens and international friction. 

Research-Based Perspective

To evaluate the long-term impact of tariffs on FMCG and FMCD sectors, a research-driven approach is essential. This involves analyzing both quantitative and qualitative data, with a focus on:

• Comparative Cost Analysis: Examining the differential impact of tariffs on import costs from various countries and their pass-through to consumers.
• Trade Volume Shifts: Using U.S. Census Bureau foreign trade data to identify changes in top import sources and goods categories.
• Investment and Supply Chain Responses: Reviewing corporate filings and government investment incentives to assess how companies adapt their manufacturing and sourcing models.
• Consumer Behavior Studies: Evaluating price elasticity and purchasing trends post-tariff changes through consumer survey data.

The use of public datasets ensures transparency and helps policymakers and businesses build robust models for risk mitigation and strategic planning.

Recommended Government Databases:

• USITC (United States International Trade Commission) – Tariff impact analysis and industry trade data: https://www.usitc.gov
  
• USTR (Office of the U.S. Trade Representative) – Trade policy announcements and strategic goals: https://ustr.gov
  
• S. Census Bureau – Foreign Trade Division – Import/export data and trade balance insights: https://www.census.gov/foreign-trade/
  
• USDA (United States Department of Agriculture) – Agricultural and FMCG trade figures: https://www.usda.gov

Outlook: Balancing Protectionism and Growth

As Trump-style tariff measures resurface, FMCG and FMCD industries must chart a course that blends strategic agility with operational efficiency. While the goal of boosting American manufacturing is commendable, the resulting volatility in cost structures, pricing, and consumer demand cannot be ignored.

“In an interconnected world, tariffs do not just raise prices—they slow down innovation and limit consumer choices,” says Prof. Harold Kim, Columbia Business School.

Looking ahead, companies that integrate resilient supply chains, adopt predictive analytics, and maintain flexible pricing strategies will be best positioned to thrive in this uncertain trade environment.

Conclusion: Navigating the Trade Winds

In 2025, as Trump’s tariff policies resurface, both FMCG and FMCD industries face a turbulent trade environment. While the core objectives of these policies—protecting U.S. manufacturing and reducing trade deficits—are clear, the impact on international trade, production costs, and consumer behavior remains complex.

FMCG companies must navigate rising input costs, shifting sourcing strategies, and a growing reliance on alternative suppliers in tariff-neutral regions. Likewise, FMCD firms are grappling with supply chain disruptions, squeezed margins, and evolving consumer spending patterns. The ripple effects of tariff-induced price hikes and trade barriers will likely shape the future of consumer goods and durables for years to come.

Ultimately, businesses that prioritize supply chain resilience, embrace innovation in pricing strategies, and leverage data analytics will have a competitive edge in this evolving landscape. While Trump’s tariff policies present challenges, they also create opportunities for companies that are adaptable, agile, and forward-thinking.

In this new trade reality, maintaining a balance between protectionism and global trade engagement will be key to sustaining long-term growth and consumer satisfaction in both the FMCG and FMCD sectors.

MarketGenics can play a pivotal role in helping FMCG (Fast-Moving Consumer Goods) and FMCD (Fast-Moving Consumer Durables) businesses navigate the complexities introduced by tariff policies.