Although President Donald J. Trump recently agreed to put a hold on planned tariffs on Mexico and Canada, he still could impose them. As of Feb. 3, Canada and Mexico reached a deal with the United States to delay the tariffs for 30 days. 

In a Feb. 5 Insights article titled, “How Food and Drink Brands Can Soften the Impact of Trump’s Tariffs,” Jenny Zegler, director of food and drink at Mintel, Chicago, highlights how tariffs would directly impact food and drink prices and supply — if tariff proposals were to become a reality.

In the article, Zegler suggests that food and drink companies as well as retailers will need to justify any price increases, while maintaining a nimble approach to their supply chains as they navigate policy changes.

“Brands will need to prepare transparent and compassionate communication regarding the reasons for any consumer-facing adjustments. Clear communication is important to avoid drawing the ire of U.S. consumers who are weary of having to adjust to new disruptions,” Zegler states. “U.S. consumers already feel like they have been unable to escape high prices. Any additional price hikes — no matter the cause — will be unwelcome by U.S. consumers who are already worn out from years of higher cost of living, especially food and drink.”

Zegler further notes that, although U.S. consumers have found money-saving tactics during the past few years, additional price hikes from tariffs would limit consumers’ options for low-cost food and drink alternatives. 

“Higher living costs would be especially hard on the 27% of U.S. consumers who describe their financial situation as tight, struggling, or in trouble,” she states. “Higher prices also would limit the leftover money of 36% of U.S. consumers who classify themselves as ‘OK’ each month.”

This all comes as the Federal Reserve Bank of New York’s Center for Microeconomic Data released the December 2024 “Survey of Consumer Expectations,” which showed that inflation expectations were unchanged at the short-term horizon, remaining at 3%; however, the one-year ahead horizon increased from 2.6% to 3%. The survey, meanwhile, found a decrease for the longer-term median inflation horizon.

Additionally, a new working paper by University of Texas’s Olivier Coibion, University of California at Berkeley’s Yuriy Gorodnichenko and Chicago Booth’s Michael Weber highlights what consumers expect and how they are preparing for potential tariffs. A survey of American consumers fielded through NielsenIQ from Dec. 13, 2024, and Jan. 6, 2024, yielded approximately 13,500 responses for the paper.

The working paper shows that respondents were asked whether higher tariffs could hypothetically make them more or less likely to make certain decisions. The survey found that 43% of respondents were more likely to purchase or stockpile goods in anticipation of higher future prices. The survey also found that 43% are more likely to “wait and see what happens to prices.”

Given this, consumers likely will be closely watching price changes in stores.