In 2025 global trade is shifting, and Donald Trump’s tariff-driven trade rules are stirring up big changes in several industries. The Fast-Moving Consumer Goods (FMCG) and Fast-Moving Consumer Durables (FMCD) sectors feel the effects the most. These sectors rely on trade across borders. They now deal with new hurdles like tariffs coming back, supply chains adjusting, and consumer behavior evolving. Let’s see what MarketGenics research has to say about it.

Under Trump’s time as president, the “America First” trade policy changed how the U.S. dealt with global trade. His push for heavy tariffs especially against China, sought to cut the trade deficit, strengthen local industries, and limit dependence on foreign-made goods. These actions were taken to increase the number of factories in America and to create more jobs in the nation. But they have also complicated international trade and this impacts businesses that require products of other nations.

FMCG companies, such as food, beverage, cleaning supplies, and toiletries manufacturers, are also facing a greater challenge because tariffs are being reintroduced. The tariffs are enforced on raw materials and packaging materials as well as finished products of such origins as China, Vietnam and Mexico. FMCD businesses on the other hand depend on international supply chains to acquire parts like semiconductors, lithium-ion batteries and other electronics. They now experience higher production costs, shipment delays, and tighter profit margins.

The possible return of these tariff rules in 2025 raises an important question for business leaders. How will they handle a market where tariffs start affecting costs, sourcing, and pricing again? This piece looks into what Trump’s tariffs mean for the FMCG and FMCD industries. It breaks down how they influence supply chains, product prices, and future industry growth. We’ll also look at how shielding domestic markets might leave lasting effects and how companies can plan to deal with these challenges.

Making Sense of Trump’s Tariff Impact

A tariff works like a tax on imported goods. During Trump's earlier presidency, his trade policies stood out for using heavy tariffs. He focused on China applying taxes on goods worth more than $370 billion. In 2025, he plans to make a comeback with similar strategies. He aims to set tariffs as high as 60% on Chinese products. His reasoning is to defend American businesses, cut trade imbalances, and support domestic production. But these steps create challenges for global FMCG and FMCD companies.

Aggressive measures shaped Trump’s approach to tariff policies, including:

● Steel and Aluminum Tariffs: These tariffs aimed to shield U.S. industries in steel and aluminum. However, they raised prices on important raw materials that companies use to make appliances and packaging.

● China-Targeted Tariffs: The U.S. imposed over $370 billion in tariffs on items imported from China. These were such products as electronics, machinery and even food related products. This action impacted on the FMCG goods and consumer durables which require use of Chinese components or items.

● Retaliatory Tariffs: The other countries introduced their own tariffs on the U.S. exports. This increased the cost of American products in foreign markets and got international trade even more difficult. Jump forward a decade, to 2025, and these trade policies are being looked at once more. Trump protectionism continues to play a major role in trade debates despite changes in leadership. Concerns on establishing job creation at home and poor supply chain are still an issue. The potential reinstatement of tariffs on goods like raw materials of electronics, and packaging poses a challenge on the import-dependent companies. Global trade remains unpredictable forcing businesses to adapt to the financial burden of these tariffs. Having to rework sourcing plans are placing businesses ahead of altered tariffs. They must also think of reshoring and diversification of suppliers and employing sophisticated data tools as a way of staying competitive. Trump’s tariff policies still have an influence on U.S. trade leaving lasting marks on major sectors like FMCG and FMCD.

FMCG Sector: Balancing Price Awareness and Import Reliance

The FMCG sector covers common household items such as packaged foods, drinks, toiletries, and cleaning supplies. Many of the raw ingredients and packaging materials used in these products come from other countries.

Main Effects:

● Rising Costs: Import taxes on materials like palm oil, aluminum foil, and plastic polymers from China and Southeast Asia are driving up production expenses.

● Increased Consumer Prices: Companies are passing these higher expenses to customers, which could lower interest in non-essential goods.

● Changing Supplier Choices: Many FMCG firms are shifting to suppliers in India, Vietnam, or Mexico to cut dependence on countries with steep tariffs.

"Tariffs create uncertainty in how prices are set. It's no longer just about what consumers want to buy but also what they can afford," says Dr. Lisa McDermott, Trade Policy Fellow at the U.S. Department of Commerce.

FMCD Sector: Supply Chain Troubles and Profit Struggles

Products like electronics, appliances, and other durable goods make up the FMCD sector. These rely on global supply chains to source parts like semiconductors, lithium-ion batteries, and display screens.

Key Issues:

● Delays in Manufacturing: High import taxes on key parts such as semiconductors, could mess up production timelines.

● Profit Squeezes: Brands like LG, Samsung, and Apple see profit margins shrinking as they either import components or build products overseas.

● Pressure on Spending: Higher prices might make customers think twice before buying pricey goods in markets hit hard by inflation.

Market Genics research shows that U.S. imports of consumer electronics went beyond $592 billion in 2023. This could account for close to 19.2 % of the nation’s total imports. Adding tariffs again might slow this climb.

Key Notes: Trump's Tariffs and Their Industry Effects

● Steel and aluminum tariffs boost the expense of appliances and their packaging.

● China-specific tariffs create issues with electronics, packaging, and parts production.

● Retaliatory tariffs from other countries limit U.S. export chances and shrink global market opportunities.

● Supply chain adjustments to find alternate suppliers make operations harder to manage.

Industry Outlook and Predictions

● FMCG Market: Market Genics estimates that the global FMCG market will reach about $4.94 trillion by 2026. It is expected to expand at a compound annual growth rate (CAGR) of 5.4 percent and could grow to approximately $7.5 trillion by 2033 maintaining the same CAGR over that time.

● FMCD Market: The FMCD market based on Market Genics data, may grow to about $1.2 trillion by 2026. This growth is expected to continue at a CAGR of 6.3 percent from 2024 through 2033.

Understanding U.S. Imports and the Role of China

Import Data Before Tariff Changes

· Consumer goods imports (FMCG category) from China in 2023: Exceeded USD 120 billion.

· Imports of electronics and durable goods (FMCD category) for the same year: Close to USD 427 billion. Over USD 150 billion came from items like electrical machinery, computers, and electronics.

These numbers show strong possibilities but also demand careful planning. Rising tariffs could drive costs up or even restrict product flows, which might affect how companies plan to grow.

How Companies Are Adjusting

FMCG and FMCD businesses are finding new strategies to counter the challenges posed by increasing trade tariffs.

● Nearshoring and Reshoring: Companies like Whirlpool and Procter & Gamble are boosting local production to avoid heavy reliance on imports.

● Supplier Diversification: Big global businesses are now getting supplies from countries like Mexico and Vietnam that avoid tariffs.

● Tech-Enabled Forecasting: Companies are using advanced data tools to predict tariff impacts and fine-tune their pricing strategies.

“Tariffs make us work smarter and operate more . Having strong and adaptable suppliers makes us more competitive,” says Craig Franklin VP of Supply Chain at Unilever North America.

Industry and Government Reaction

Groups like the U.S. Chamber of Commerce and the National Retail Federation worry about keeping long-term competitiveness alive under a protectionist approach. The Office of the U.S. Trade Representative (USTR) points out the need to balance protecting local industries and meeting global trade obligations.

The USTR’s 2024 Trade Policy Agenda mentions goals like “supporting supply chain resilience, expanding market access, and reducing burdens on American consumers.”

The U.S. Department of Commerce has stepped in to back domestic manufacturers hit by retaliatory tariffs by offering targeted assistance. They rolled out incentives to push companies toward building up local supply chains. To encourage factory relocations and expansions within U.S. borders, they now provide subsidies and tax credits tied to capital spending.

States like Michigan Ohio, and Texas, areas with strong manufacturing sectors, have doubled down with their own efforts. They set up grants and training programs to address shortages in skilled workers needed to support reshoring plans.

This approach reflects two main goals: shielding U.S. industries and tackling challenges like rising consumer costs and international conflicts.

To understand how tariffs affect FMCG and FMCD sectors over time, researchers need to rely on detailed studies. This includes looking at numbers and trends while digging into these key areas:

● Cost Comparison: Researchers study how tariffs change the price of imports from different countries, and how much of that cost gets passed on to consumers.

● Trade Trends: They use foreign trade data from the U.S. Census Bureau to spot shifts in where imports come from and which product categories are involved.

● Company Adjustments: By analyzing corporate reports and government incentives, they figure out how businesses change their production and sourcing strategies.

● Consumer Choices: They track how changes in prices affect what people buy by studying consumer surveys on spending habits and price sensitivity.

Using public datasets promotes transparency and allows policymakers and businesses to develop strong models to reduce risks and plan strategies .

Outlook: Navigating Between Growth and Protectionism

With Trump-like tariffs making a return, companies in FMCG and FMCD sectors need to find a path that mixes smart strategies with efficient operations. Supporting American manufacturing makes sense, but the ripple effects on costs, pricing, and consumer behavior are hard to miss.

“In today’s connected economy, tariffs do more than hike up costs—they block innovation and cut down consumer options,” explains Prof. Harold Kim from Columbia Business School.

To succeed in this changing trade scene, businesses should build stronger supply chains, use tools like predictive analytics, and keep pricing adaptable to handle uncertainty.

Steering Through Trade Shifts

By 2025, Trump’s tariff policies return creating a tough trade scene for both FMCG and FMCD sectors. These policies aim to protect U.S. manufacturing and cut trade deficits, but their effects on global trade, production expenses, and buyer habits are tangled and tricky to predict.

FMCG businesses struggle with higher material costs changing sourcing plans, and growing dependence on suppliers in regions untouched by tariffs. FMCD companies face problems like supply chains breaking down tighter profits, and shifting consumer spending trends. Price increases and trade restrictions driven by tariffs will leave a mark on how people buy everyday goods and durable products for a long time.

Companies that focus on making supply chains stronger, try new pricing methods, and use data analysis can stay ahead in this changing market. Trump’s tariff policies bring some hurdles, but they also open doors for flexible and quick-moving businesses.

In today’s trade environment, finding the right mix between shielding local industries and staying involved in the global market will be important to grow and keep customers happy in both FMCG and FMCD industries.

Market Genics can help FMCG (Fast-Moving Consumer Goods) and FMCD (Fast-Moving Consumer Durables) companies handle the challenges that come with these tariff rules.