WASHINGTON — With supply chain disruptions spreading and leading food companies downgrading their economic forecasts since a minimum 10% tariff took effect on most imports to the United States on April 5, food producers and farmers have been closely watching the White House for signs of progress on trade talks with virtually every key US trading partner.

On May 7, they cautiously weighed a major announcement: the first official trade negotiations between the United States and China, set to take place in Switzerland from May 9 through May 12.

“My sense is this will be about de-escalation,” said US Treasury Secretary Scott Bessent. “We’ve got to de-escalate before we can move forward.”

At stake between the two nations: 125% or higher tariffs on everything from wheat to food packaging to farm equipment, imposed by the White House and Beijing since early April. That includes more than $15 billion per year worth of wheat, soybeans, sorghum and corn shipped from US producers to China, as well as a broad list of ingredients and goods imported into the United States.

David McInstray, chief financial officer for WK Kellogg Co., recently said his company had downgraded its 2025 economic forecast to account for Kellogg’s current tariff exposure on imported ingredients.

“Based on the tariffs currently in place, we expect this impact to be between $2 million to $4 million for the full year,” McInstray said.

The Hershey Co., meanwhile, estimated it will face an additional $15 million to $20 million in tariff expenses — just in the second quarter of 2025.

“We have other raw material inputs that are imported aside from cocoa,” said Steven Voskuil, senior vice president and CFO at Hershey. “China for us is not huge, but China is still in that calculation as well. We do have raw materials that come from other countries as well that also still have some tariffs impact.”

Trade at US ports slipping

Since the end of March, trade at US ports has fallen sharply on canceled orders and a reduction in sailings by incoming freight ships from Asia, driven by tariff and trade concerns. Freight company HLS Group reported more than 80 canceled sailings of Chinese-flagged container vessels in April alone, equal to 640,000 to 800,000 TEUs (twenty-foot equivalent units), or standard shipping containers.

“Container ships sent over from Asia to the United States have started arriving half-full, as some US buyers cancel orders,” explained Arlin Wasserman, founder and managing director of Changing Tastes, a US-based food industry consultancy. “It won’t be long before overall shipping will slow down, as these shipping companies try to send only full ships instead of accepting higher costs.”

From the final week of March to the first week of April, when the latest round of tariffs took effect, week-over-week ocean bookings declined 49% for overall TEUs, 64% for US imports and 30% for US exports, according to data from the US Department of Agriculture and trade tracker Vizion. US container imports from China fell more steeply, down 64% week over week, while US exports to China slid by 36%.

The Port of Savannah saw a 13% decrease in TEUs during that period, Georgia Ports officials confirmed. The Port of Houston was down 2.8%, New York/New Jersey down 2.6%, Norfolk down 12% and New Orleans down 24%.

West Coast ports that typically ship to Asia were particularly hard hit, with TEUs down 17% from the Port of Los Angeles — the largest US port by TEU volume in 2024 — 2.8% from Oakland, 3.5% from Seattle, 28% from Tacoma and 39% from Dutch Harbor, Alaska.

For now, most agricultural trade between the United States, Mexico and Canada remains exempt from tariffs under the United States-Mexico-Canada Agreement (USMCA), which President Donald Trump negotiated during his first term. But that hasn’t turned down tensions between the North American neighbors. The Trump administration has placed an additional 25% levy on most other imports from Mexico and Canada, and Canada has responded by adding 25% tariffs on US orange juice, peanut butter, beer, coffee and a variety of other non-exempt food products.

The White House’s 25% steel and aluminum tariff, which includes packaging goods such as soda cans, also remains in place.

“The tariffs seemingly change several times per week right now,” Wasserman observed, so from the perspective of food companies, “there are no smart business decisions to make,” he added.

Wheat to China

One recent development that could help better position the United States in its trade talks with China: reports of excessive heat and dryness in China’s Henan province, a key wheat-growing region.

Chinese officials said high temperatures and dry, hot winds were threatening the development of Henan’s current wheat crop, which typically is harvested in late May to mid-June.

Henan produces about one-third of all wheat in China, the world’s top wheat producer and wheat consumer. China accounted for more than 140 million tonnes of global wheat production in 2024, according to data from the Foreign Agricultural Service of the USDA. The world’s top five wheat-producing regions — China (18% of global supply), the European Union (15%), India (14%), Russia (10%) and the United States (7%) — produced nearly two-thirds of the world’s wheat last year.

With poor weather also hampering Russia’s wheat crop, US exporters may find an opening if tariffs fall away. In 2024, China imported more than $482 million worth of US wheat, about 8% of total US wheat exports, according to the USDA.

Other top destinations for US wheat, including the Philippines, Japan and South Korea, also are subject to ongoing trade negotiations, with individualized tariffs set to begin in July if agreements can’t be reached.

Nuts to tomatoes

Supply chain disruptions and falling exports owing to tariff and trade concerns have thrown a wrench in global ingredient markets, from nuts to tomatoes.

The Ivory Coast’s Cotton and Cashew Council recently reported raw cashew sales to Vietnam have fallen precipitously this year in response to US tariffs. Ivory Coast is the world’s top cashew grower, and Vietnam typically purchases about 80% of the small West African nation’s production, of which 60% is resold to US companies.

So far this year, Vietnamese buyers have purchased about 200,000 tonnes of Ivory Coast cashews, down from a typical 700,000 to 800,000 tonnes, the agency reported.

Under the White House’s individualized tariffs, Ivory Coast is facing a rate of 21%, the highest in West Africa, while Vietnam’s tariff rate is set at 46%. Those tariffs currently are paused until July.

Mexican tomato exports to the United States, exempt from tariffs under the USMCA, are under pressure after the White House announced its intentions to withdraw from a separate trade agreement, the dissolution of which could raise duties on Mexican tomatoes by more than 20%. The new duties could take effect beginning July 14, White House officials said.

On May 6, Mexican Agriculture Minister Julio Berdegue said he and US Secretary of Agriculture Brooke Rollins were working with tomato growers in both nations to preserve the agreement. Proponents of the duties claim they will help rebuild the US tomato industry.

The United States is Mexico’s top tomato export market, worth nearly $3 billion in trade last year, with Mexico supplying about 70% of all tomatoes US consumers eat.

“Produce is not a large-margin business,” Skip Hulett, chief legal officer of NatureSweet, a US-based company that grows tomatoes in Mexico, recently told The Associated Press. “We’re determining what portion of the cost we could absorb, but these added costs will most certainly need to be passed on to the consumer.”