How Tariffs Are Raising Costs in the U.S. Nutraceuticals Industry
Imagine picking up your usual multivitamin at checkout and noticing a 50% price increase—an unsettling indication of how tariffs are driving up costs in the U.S. nutraceuticals market (Chain Store Guide).
How Tariffs Are Negatively Impacting the Nutraceuticals Industry
The U.S. nutraceuticals industry is facing unprecedented challenges due to recent tariff escalations. In early 2025, new tariff structures were introduced: a Universal Tariff of 10% applied broadly (effective April 5, 2025) and Reciprocal Tariffs with country-specific rates ranging from 11% to 50% (effective April 9, 2025). These tariffs add on top of existing duties, creating a compounding effect that impacts the entire supply chain.
For manufacturers, this means increased costs, supply disruptions, and difficult pricing decisions. For consumers, it results in higher prices and potentially fewer product options on shelves.
Defining Tariffs and the U.S. Nutraceuticals Market
Tariffs are taxes imposed on imported goods, typically as ad valorem (percentage of value) or specific duties (fixed amount per unit). The nutraceuticals industry depends heavily on global supply chains for raw materials and ingredients. Key supplier countries include India, China, the European Union, South Korea, and Taiwan, which together provide over 70% of the U.S. market’s botanical extracts and vitamins.
The U.S. nutraceuticals market is a significant economic sector. According to Grand View Research, it was valued at USD 163.7 billion in 2024 and is projected to grow at a CAGR of 6.2% from 2025 to 2030. However, this growth is now threatened by tariff-related challenges.
What Counts as a Tariff?
The supplement industry faces several types of tariffs:
Basic import duties (1-5% for most raw ingredients)
The new Universal Tariff (10% on most imports)
Country-specific Reciprocal Tariffs: 34% for China, 32% for Taiwan, 27% for India, 26% for South Korea, 20% for the EU (SupplySideS&J)
Special duties on specific ingredients
For example, turmeric imports from India are subject to U.S. tariffs and customs duties ranging from 1% to 3%, depending on the form (powder, extract, or raw turmeric). With the new tariff structure, these rates have increased substantially.
Overview of the Nutraceuticals Industry in the United States
The U.S. nutraceuticals market includes vitamins, minerals, botanicals, probiotics, protein supplements, and functional foods. Precedence Research reports the market surpassed USD 159.99 billion in 2023 and is expected to reach approximately USD 260.70 billion by 2033, growing at a CAGR of 5% from 2024 to 2033.
This growth trajectory is now at risk due to tariff-induced challenges.
Ingredient Cost Inflation: Tariffs at Work
Tariffs have caused significant price increases for key nutraceutical ingredients. Raw material costs have surged for essential components like Vitamin C (ascorbic acid), amino acids (glutamine, lysine), and herbal extracts (ginseng).
Key Ingredient Shortages and Price Surges
Several key ingredients have experienced dramatic price hikes:
Vitamin C: 30% price increase since April 2025
Turmeric extracts: 25-35% cost increase
Amino acids from China: 40% price jump
Omega-3 fish oils: 15-20% higher costs
These increases directly affect product costs and ultimately consumer prices.
Case Example: Botanical Extracts from Asia
Following China’s tariff increase to 34%, many U.S. manufacturers report sharp cost rises for ashwagandha and turmeric extracts, squeezing already thin margins (NutraIngredients-Asia). Many producers face difficult decisions as they try to maintain competitive pricing while absorbing these substantial cost increases.
Supply Chain Disruptions Fueled by Tariffs
Beyond direct cost increases, tariffs have caused significant supply chain disruptions. Port congestion has delayed folic acid shipments at West Coast terminals, according to Catalyst Nutra. Customs processing times have lengthened, shipments face delays, and companies struggle with inventory planning.
Delay in Imports and Production Bottlenecks
Numerous blank sailings and increased congestion have disrupted shipping schedules and delayed key ingredient deliveries, causing production backlogs. These disruptions create bottlenecks as manufacturers wait for delayed ingredients, forcing some to halt production lines entirely.
Logistics and Transportation Cost Increases
Shipping companies have raised rates to cover increased administrative costs and risks associated with tariff-affected cargo. Unpredictable routing and port delays have led to greater fluctuations in estimated arrival times, complicating inventory planning and supply chain coordination.
Additional costs include increased warehousing fees as companies stockpile ingredients ahead of tariff implementation dates.
Consumer Impact: Higher Prices and Limited Choice
Ultimately, the tariff burden falls on consumers. The Federal Reserve Bank of New York found that the 2018-2019 tariff implementations cost the average American household about $831 annually. The new policies could increase those costs to an additional $4,600 per year.
Effect on Retail Prices and Profit Margins
Small and medium-sized supplement brands face tough choices: absorb cost increases and reduce profit margins, or pass costs to consumers and risk losing sales. Many opt for a combination, absorbing some costs while raising prices 10-15%.
Large corporations can better withstand these pressures through economies of scale and diversified supply chains, putting smaller companies at a competitive disadvantage.
Industry Responses and Mitigation Strategies
The nutraceuticals industry is responding to tariff challenges through various strategies. Brian Gould, CEO of TruLife Distribution, advises that companies should assess the situation with a calm and data-driven approach, emphasizing collaboration as an important strategy. Many companies are hiring regulatory experts, customs-law specialists, and trade-compliance attorneys—niches where Crescent Edge Consulting excels at finding top talent to navigate evolving tariff regulations.
Sourcing Alternatives and Reformulation
Companies are actively seeking alternative suppliers in countries with lower or no tariffs. Some are reformulating products to use different ingredients or reduce heavily tariffed components.
Others are investing in domestic sourcing where possible, though U.S. production capacity for many botanical ingredients remains limited.
Lobbying for Policy Change and Trade Agreements
The Natural Products Association (NPA) is working with agencies to advocate for fair trade policies and tariff relief, ensuring members remain compliant and minimizing business disruptions.
Industry groups are pushing for exemptions for health-related products and ingredients not readily available domestically.
Future Outlook: Navigating Tariffs in the U.S. Nutraceuticals Industry
The future remains uncertain, but most analysts expect tariffs to remain a significant factor for at least the next 12-24 months. Companies must develop both short-term coping strategies and long-term structural changes to their business models.
Potential Policy Remedies
Several policy options could provide relief:
Targeted exemptions for health-related ingredients
New trade agreements with key supplier nations
Gradual phasing of tariff rates to allow adjustment
Tax incentives for domestic ingredient production
The Natural Products Association (NPA) continues lobbying for targeted tariff relief and potential amendments to the Harmonized Tariff Schedule in 2025.
Long-Term Implications for Domestic Manufacturing
The tariff situation may accelerate investment in U.S.-based extraction and processing facilities. While this could strengthen domestic supply chains long-term, the transition period will be challenging and costly.
Conclusion: Addressing Tariff Challenges in U.S. Nutraceuticals
Tariffs have created a perfect storm of challenges for the U.S. nutraceuticals industry: higher ingredient costs, supply chain disruptions, and increased consumer prices. These issues threaten both industry growth and consumer access to health products.
Businesses must adapt through strategic sourcing, reformulation, and advocacy. Consumers should prepare for continued price increases. Policymakers need to consider the health implications of tariffs on nutritional products.
With strategic planning and industry collaboration, the U.S. nutraceuticals sector can weather this storm. But the path forward requires flexibility, innovation, and a clear understanding of the complex tariff landscape.
Contact Crescent Edge Consulting—a modern recruiting agency specializing in the Nutraceuticals, Dietary, and Herbal Supplements sectors—to connect with top talent who excel in performance and cultural fit, ensuring your business stays ahead of tariff challenges.
