American and Chinese shipping containers crashing into each other

Supplements Caught in Trade War Crossfire

Denis Storey
July 12, 2019

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After years of silence, tariffs came out of retirement last year when President Trump levied them against trade allies and rivals alike. In 2018, Trump launched the global trade war with 25 percent tariffs on all steel imports and a 10 percent tax on aluminum imports.

China retaliated quickly, imposing tariffs on a variety of American agricultural products, including cotton, pork, and soybeans.

The back and forth has continued for more than a year now, with China firing the latest salvo: tariffs on more than 5,000 U.S. products, some as high as 25 percent, according to the Chinese Finance Ministry. These tariffs target roughly $60 billion of U.S. goods.

Supplement ingredients get caught up

The latest round of tariffs will hit dietary supplement makers hard since it includes dozens of ingredients used in dietary supplements. In comments to the Office of the United States Trade Representative last month, the American Herbal Products Association (AHPA) estimated that the tariffs could be responsible for rises in operating costs “from several hundred thousand dollars to as much as $2.4 million.”

Worse still, AHPA explained that since the vast majority of “U.S. manufacturers, packagers, labelers, or distributors of dietary supplement products” are small businesses—89 percent—they would be hit particularly hard by tariffs on the ingredients they import to manufacture their products.

For these companies, finding alternate or domestic suppliers to circumvent the tariffs is not as simple as it sounds. It takes time, money, and a lot of work. As AHPA points out, “Even if suppliers in other countries decide to cultivate or produce crops currently sourced from China, in many cases the resulting material may not meet the needs of U.S. companies. By law, ingredients used in dietary supplements must meet stringent manufacturer-set specifications free from contaminants that may adulterate the finished product. Manufacturers of these and other herbal products often set composition specifications, such as on the content of various botanical constituents. These variables are often significantly impacted by growing and cultivation conditions.”

But that doesn’t mean it’s impossible. Manufacturers in every industry change suppliers all the time, because of economics, deteriorating relationships, or a simple decision to improve the quality of their product. TraceGains offers a unique solution to help dietary supplement companies make more informed decisions about their suppliers.

Market Hub can help

TraceGains Market Hub is a robust sourcing directory for items, packaging, and service providers. Powered by TraceGains Network, manufacturers and brand owners can procure new items or ingredients, build and reformulate recipes, and automatically collect supporting quality and regulatory documentation from an ever-growing document library.

With a supplier network spanning the globe, buyers can rapidly cut time to market by leveraging powerful search criteria. TraceGains Market Hub is a dynamic sourcing directory to:

  • Search for products based on criteria such as country of origin, organic, non-GMO, kosher, etc.
  • Instantly access and review the associated documentation for each vendor.
  • Collaborate with colleagues on both new ingredients and new formulations.

Reach out to TraceGains for Market Hub demo today.

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