At first glance, today’s headlines about the end of the de minimis exemption—and the 145% tariffs now hitting small Chinese shipments—seem mostly about clothes, toys, and cheap gadgets.

But hidden beneath the noise about fast fashion and home décor lies a potential ticking time bomb for U.S. food and beverage companies.

Here’s why this matters far more than most industry insiders—and certainly most consumers—currently realize.

1️⃣ Packaging Shockwaves: The Supply Chain Domino Effect

Most emerging and mid-sized U.S. food and beverage brands do not produce packaging domestically. Why?

• U.S. packaging production is expensive and requires large MOQs (Minimum Order Quantities)
• Many specialized items (custom caps, unique glass bottles, biodegradable films, holographic shrink sleeves) come from China or Southeast Asia
• Even large U.S. companies buy Chinese molds, dies, and packaging components

Brands—especially startups—routinely source:

Before today:
These items often shipped in small, $300 to $800 batches to avoid duties and storage issues.

Now:
Those same items face 145% tariffs—or more. A $500 shipment could now cost $1,225 or more before shipping.

Impact:
👉 Startups and craft brands will be squeezed out of innovation or forced to increase retail prices.
👉 Mid-size brands will either absorb costs (cutting already tight margins) or pass them along to consumers.

2️⃣ Co-Packer Crunch: Rising Costs and Delays

Many co-packers, even for established brands, source replacement parts, filters, and small run packaging from China under de minimis rules.

Now:

• Parts will cost more and take longer due to customs delays
• Maintenance and repairs may lag, reducing line uptime
• Small brands trying to scale will face bottlenecks or higher MOQ minimums

Consumer impact:
👉 Production delays may lead to more out-of-stocks
👉 New product launches may be postponed or canceled
👉 Rising wholesale costs will hit grocery shelves by late summer or fall 2025

3️⃣ Retail Display & POS Disruption: No More Cheap Merchandising Tools

Many U.S. brands—especially smaller ones—order customized POS materials or retail displays from overseas:

• Corrugated display shippers
• Branded shelving
• Metal racks
• Shelf talkers and wobblers

De minimis allowed test runs and small regional orders without punishing tariffs.

Now:
Small orders for displays or marketing materials will become prohibitively expensive. Domestic options require long lead times and large minimum orders.

Impact:
👉 Brands will reduce or eliminate retail promotions, hurting shelf visibility
👉 Large brands may monopolize endcap and promotional space even more
👉 Independent retailers will see fewer creative displays and merchandising support

4️⃣ Ingredient and Tool Sourcing for DTC Brands

Hundreds of direct-to-consumer food brands, spice companies, specialty oils, and baking kits rely on overseas suppliers for:

• Small-run ingredients (specialty spices, sweeteners, rare teas)
• Kitchen tools included in bundles (spoons, whisks, glass jars)
• Custom inserts or gift packaging

These were often imported in low-cost, under-$800 batches.

Now:
👉 Those items will either stop arriving or become 2x to 3x more expensive
👉 Subscription box prices will rise
👉 Some companies may shut down DTC offers entirely

5️⃣ Lower-Income Shoppers Hit First—And Hard

A CNN article dated May 2, 2025 pointed out that 48% of de minimis shipments went to America’s poorest zip codes.

That includes:

• Kitchen gadgets
• Food prep items
• Baking accessories
• Budget-conscious home cooking tools

Consumers who can’t afford $400 mixers or $30 gadgets at Target turned to Temu and AliExpress.

Now:
👉 These consumers will either pay dramatically more or stop buying altogether
👉 Value grocery channels will feel the pinch as accessory items disappear or double in price
👉 Lower-income consumers may reduce purchases of specialty foods and tools

Long-term risk:
👉 A growing divide between affluent and budget-conscious shoppers in food purchasing behavior
👉 Specialty brands may shift to premium-only markets, leaving fewer choices for value shoppers

6️⃣ The Bigger Threat: Innovation Freeze

This is the most serious—and least discussed—impact.

For over a decade, U.S. food and beverage entrepreneurs have relied on global sourcing flexibility to:

• Test new SKUs
• Order small runs of specialty packaging
• Trial promotional concepts

De minimis allowed them to do this without betting the farm.

Without it:

• Cost of testing rises
• Minimum order quantities become barriers to entry
• Smaller, riskier ideas won’t get to market

Result:
👉 Fewer innovative brands
👉 Slower category evolution
👉 Large brands gain more power as barriers rise for small players

A Hidden Impact That May Surprise Everyone

Expect domestic co-packers and U.S. packaging companies to raise prices. Why?

1. Demand will spike as brands scramble for U.S. sources.
2. Without Chinese competition, U.S. suppliers regain leverage.

Even brands trying to reshore their sourcing will likely face:

• Higher prices
• Longer lead times
• Stricter order minimums

Conclusion: The Unseen Food & Beverage Fallout

The mainstream media is focused on fashion and electronics. But behind the scenes, the end of de minimis could:

• Push small food and beverage brands out of business
• Slow down the launch of new and innovative products
• Lead to higher prices at the shelf
• Reduce variety and choice for all consumers—especially those in lower-income brackets

This won’t happen overnight. But by late 2025 and into 2026, consumers and retailers will start seeing the cumulative effects.

Pro Tip for Brands:
If your business relies on small imports for packaging, ingredients, or promotional materials, start renegotiating with domestic suppliers now. Prices are about to climb—waiting will only increase your costs and risks.