Pursuant to the USMCA, Canada and Mexico agreement, they can export chocolate to the USA without a custom – regardless of where cocoa comes from. Canada additionally does not impose duties on raw and semi -detached cocoa, and Mexico cultivates them himself. Meanwhile, American producers currently pay from 10 percent. up to 25 percent duties, and from August 1 it can increase to up to 35 percent, writes the Reuters agency.
The largest American manufacturer, Hershey, warned that if they remain, the company would pay as much as $ 100 million in the third and fourth quarter. Small companies, such as Taza Chocolate with Massachusetts, are not able to transfer production. In May she paid $ 24,24. Caits for a cocoa container from Haiti, and for the next – from the Dominican Republic – is preparing to spend over $ 30,000.
– “For a company of our size, it is equal to losing the margin of profit. Our first reaction was: ok, the rules have changed, we must find the cheapest solution for the consumer” – says Alex Whitmore, the founder of Taza, in an interview with Reuters. He considered moving part of the production to Canada, but – as he admits – “The business environment is so uncertain that we are only waiting for now. Many of us, company owners, just frozen.”
Customs show that the export of chocolate from Canada to the USA increased by 10 percent. In the first five months of the year – some manufacturers clearly use the new situation.
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Manufacturers from Canada and Mexico gain, American consumers pay more
As Reuters writes, contract producers gain the most, Such as Barry Callebaut, who has almost half of his plants in Canada and Mexico. The company CEO, Peter Feld, said: “We have plants in the USA, Canada and Mexico, so we can adapt to this situation.“
The tariffs coincided with a difficult time for the industry – consumers buy less after years of inflation, and cocoa prices have increased rapidly due to bad weather and diseases in Ghana and on the ivory coast. Today, cocoa is up to 30-50 percent chocolate plate cost.
In July, Hershey introduced double -digit price increases, but assures that they do not result from tariffs. Taza raised wholesale prices by 10 %, and retail – from 5.99 to $ 6.99, admitting, however, that further increases are inevitable.
Mars, a producer of M&MS, who has just announced an investment $ 2 billion. In American production, he claims that he has not changed the supply structure. Lindt will consider the decision after August 1, writes Reuters.
Meanwhile, Mexican companies record an increase in interest.
– “Tariffs create new opportunities for companies from Mexico. American companies are increasingly asking us to ask for production with us,” says Paolo Quadrini from Aschoco Confimex.
The US chocolate market is worth $ 25-30 billion. Canada provides about 10 percent imported chocolate, Mexico – 2.5 percent.
Tareq Hadhad, president of the Canadian company Peace by Chocolate in an interview with Reuters says directly: “It's an advantage for us.”
