Tariffs and Reshoring in 2026: What Food & Beverage Brands Need to Know Before Choosing a Manufacturer

Tariffs stopped being a background line item some time in 2025. Since January of that year, U.S. tariff policy has changed more than 50 separate times, and by the Tax Foundation's count new tariffs now touch roughly 54% of everything the country imports. For food and beverage brands, the practical result is that a cost model built eighteen months ago is almost certainly wrong.

This is a plain-English look at where tariffs stand as of September 2026, exactly where they bite in a food or beverage supply chain, and how to run the domestic-versus-offshore math honestly — including the cases where offshore still wins and the labeling trap that catches brands who assume U.S. co-packing earns them a "Made in USA" claim.

Rates and legal authorities in this space change constantly. Treat everything below as a starting point for a conversation with a licensed customs broker or trade counsel, not as compliance advice.

What actually changed in 2026

The single biggest shift was legal rather than economic. A short timeline:

• February 20, 2026 — The Supreme Court held that the "reciprocal" tariffs imposed under the International Emergency Economic Powers Act (IEEPA) were unlawful. Within hours, the administration terminated them and reimposed a flat additional 10 percentage points on imports from every country under Section 122 of the Trade Act of 1974.

• July 24, 2026 — Section 122 authority expired on schedule, 150 days after it took effect. Congress did not extend it, and it was not replaced by a single successor. There is currently no across-the-board tariff on U.S. imports.

• What survived — The tariffs that matter now are the sectoral ones, which were never dependent on IEEPA: Section 232, Section 301, and Section 338.

The aggregate number is smaller than the headlines suggest. The effective tariff rate — customs duty collected divided by total goods imports — is running near 7.2% for 2026, down from a 2025 peak around 7.7% but still roughly three times the 2.4% rate of 2024. Penn Wharton's Budget Model put the July 2026 figure at 6.7%.

An average, though, is a terrible planning tool. The averages are low because most goods enter duty-free; the exposure is concentrated in a handful of categories, and several of them sit directly in a beverage or packaged-food bill of materials.

The authorities still in force

• Section 232 — 50% on steel, aluminum and copper; 25% on derivative products "substantially made" from those metals; 25% on autos and 10% on auto parts; 25% on furniture and 10% on lumber; 100% on patented pharmaceuticals.

• Section 301 — 10% to 12.5% on roughly 60 trading partners tied to a forced-labor investigation, plus 25% on Brazil.

• Section 338 — 50% on selected Canadian goods, effective August 19, 2026.

Where this hits food and beverage specifically

1. Metal packaging is the quiet one

Most brands watch ingredient costs and forget the container. On April 7, 2026 the Section 232 structure was reworked: pure aluminum, steel and copper stayed at 50%, derivative products made substantially from those metals dropped to 25%, and products with 15% or less metal content became exempt.

That restructuring did not help canned goods much. The Can Manufacturers Institute's application to add filled food and beverage cans to the derivatives list was denied, and CMI's president described the adjustments as keeping "the status quo." Aluminum sheet, foil and containers — the exact inputs behind a 12 oz can — remain at the 50% rate, a point the Brewers Association has raised repeatedly on behalf of craft brewers. Aluminum lids and ends landed at the lower 25% tier.

If you are launching a canned beverage, a shelf-stable soup, or anything in a metal closure, packaging is likely your largest tariff exposure and your most reshorable one.

2. Canada became expensive in August

This is the newest development and the one most brands have not modeled yet. Effective August 19, 2026, a 50% Section 338 duty applies to selected Canadian imports, including:

• Dairy — roughly 52 tariff classifications covering specified milk and cream products, whey, lactose and casein

• Alcoholic beverages — beer, wine, cider, other fermented beverages and distilled spirits

• Motor vehicles and a long tail — over 400 classifications that also reach agricultural goods, textiles, wood products and machinery

Critically, USMCA origin does not exempt covered goods. A Canadian whey protein isolate that shipped duty-free in July can carry a 50% duty in September. If you make protein powders, RTD shakes, bars, bakery items, or anything leaning on Canadian dairy proteins, this is an immediate margin event — and it is one a U.S. dairy-processing partner can often solve.

3. Some inputs cannot be reshored at all

Coffee, cocoa, vanilla, tropical fruit, many spices — the United States does not grow these at commercial scale, so no amount of domestic co-packing changes their origin. Agricultural staples in this category have seen targeted relief before, notably the exemption of more than 200 agricultural products in late 2025, but that relief was tied to the IEEPA framework the Supreme Court later struck down. The lesson is not that these inputs are safe; it is that their treatment moves independently of your manufacturing decisions.

4. Volatility is itself a cost

Fifty-plus policy changes in twenty months means any quote with a 90-day ocean transit attached carries a duty rate you cannot fully know at the time you commit. Domestic production compresses that window from months to weeks, which has value even when the unit price is higher.

Running the real math: total landed cost

The most common mistake we see is comparing an offshore FOB price to a domestic per-unit price. They are not the same number. A defensible comparison includes every line below.

Compare these lines, not just the unit price:

• Unit manufacturing cost — often lower offshore, often higher domestically. This is the only line most brands compare.

• Duty on finished goods and inputs — variable offshore and changed 50+ times since 2025; zero on domestic inputs, with duty only on the ingredients you still import.

• Ocean and inland freight — significant and volatile offshore; domestic truck or rail is cheaper and far more predictable.

• Cash tied up in transit — 60 to 120 days of working capital offshore, versus days to weeks domestically.

• Minimum order quantity — typically higher offshore; domestic co-packers are usually more flexible, especially on pilot runs.

• Inventory carrying and obsolescence — long lead times force higher safety stock; shorter ones let you replenish instead of stockpile.

• Quality, rework and recall risk — harder to audit and remediate at distance; domestic sites allow visits and faster corrective action.

• Speed to reformulate or change packaging — months offshore, weeks domestically.

• Customs brokerage and compliance overhead — an ongoing cost offshore, minimal on domestic production.

Pro tip: Ask every quoting partner for a fully landed cost per finished case delivered to your 3PL — not an ex-works or FOB number. When you compare landed to landed, the domestic gap is usually far smaller than the unit price suggests, and in tariff-exposed categories it sometimes inverts.

Where offshore still wins — honestly

Reshoring is not universally the right answer, and a co-packer who tells you otherwise is selling. Offshore or nearshore production often remains the better economics when:

• Your primary input simply is not grown or refined in the United States

• You are running very high volumes of a low-margin commodity where pennies per unit decide the category

• The process requires specialized equipment with little domestic installed base

• Direct labor is the dominant cost and automation is not viable at your volume

• You are selling primarily into non-U.S. markets, where U.S. duty is irrelevant

The honest framing is that tariffs have narrowed the gap in many packaged food and beverage categories — not that they have eliminated it everywhere.

The "Made in USA" trap

Brands regularly assume that moving to a domestic co-packer earns them a "Made in USA" label. It does not, on its own, and the enforcement environment in 2026 is the most aggressive it has been in years.

Under the FTC's Made in USA Labeling Rule (16 C.F.R. Part 323), an unqualified claim requires that a product be "all or virtually all" made in the United States: final assembly or processing in the U.S., all significant processing in the U.S., and U.S.-sourced ingredients or components. A can of soup packed in Ohio from imported tomato paste and an imported can body is not "Made in USA."

What changed this year:

• March 13, 2026 — Executive Order 14392 directed the FTC to prioritize enforcement against unlawful Made in America claims, to consider rulemaking requiring online marketplaces to verify origin claims, and to pursue potential False Claims Act liability for government contractors who misrepresent origin. Commentators have described it as a shift from complaint-driven enforcement to proactive scrutiny of e-commerce listings.

• April 14, 2026 — The FTC announced three enforcement actions and two closed investigations over unqualified or unsubstantiated origin claims.

• Exposure — Rule violations carry civil penalties exceeding $50,000 per violation, and recent Made in USA settlements have run from six figures into the millions. Private class actions typically follow.

Use qualified claims instead

Qualified claims are permitted, and they are usually the correct answer for a food or beverage brand with a mixed bill of materials. They must be truthful, substantiated, and the qualification must be clear, prominent and understandable. Workable examples:

• "Made in USA of U.S. and imported ingredients"

• "Packed in USA"

• "Roasted and packed in the USA from imported green coffee"

• "Blended in the USA"

Ask your co-packer, in writing, for country-of-origin documentation on every input and for the specific packaging components they source. You need that file before artwork goes to print, not after.

A six-step action plan

1. Map HTS codes for every input, including packaging. Most brands know their ingredient origins and have never looked up the code on their can, closure, film or corrugate.

2. Rebuild your cost model as fully landed cost per case. Include duty, freight, brokerage, and the carrying cost of in-transit inventory.

3. Settle who owns duty in writing. Incoterms decide this. A DDP quote and an FOB quote at the same headline price are very different deals.

4. Dual-source your most tariff-exposed component first. For most beverage brands that is the can or the closure, not the formula.

5. Get origin claims reviewed before printing labels. Relabeling a truckload is cheaper than an FTC action, and far cheaper than both.

6. Put tariff language in your supply agreements. Define who absorbs a rate change mid-contract, at what threshold, and with how much notice — on both sides.

What to ask a U.S. co-packer

• Which of my inputs would you source domestically, and which would still be imported?

• Can you provide country-of-origin documentation for every ingredient and packaging component?

• Where do your cans, closures, films and corrugate come from?

• What is your fully landed cost per case delivered to my distribution point?

• What is your MOQ for a pilot run, and for steady-state production?

• If a tariff rate changes mid-contract, how is that handled?

• What certifications do you hold, and when was your last third-party audit?

• What is your realistic lead time from PO to finished pallets today?

The bottom line

Tariffs have not made domestic manufacturing automatically cheaper. They have made the comparison worth redoing — with metal packaging, Canadian dairy inputs, and duty volatility as the three lines most likely to move your answer. Brands that re-run the math on total landed cost, rather than unit price, are the ones finding real savings; brands that assume a U.S. co-packer also hands them a "Made in USA" label are the ones creating a new problem.

Reshoring itself is not a blip. Reshoring and foreign direct investment job announcements reached roughly 244,000 in 2025, up from 11,000 a year in 2010 — a 25% compound annual growth rate over fifteen years. The infrastructure to make things here is being built.

Ready to compare? Browse the Manufacturer Directory to see U.S. co-packers and contract manufacturers by category, certification and capacity. Or submit a quick Manufacturer Match Request and we'll connect you with facilities that fit your volume, category and packaging format — so you can get real landed-cost quotes instead of estimates.