How to Get Ahead of the Tariffs for Dietary Supplement Companies
Imagine it's April 3, 2025: overnight, your China-sourced vitamin C cost spikes 25% and Japanese CoQ10 jumps 15%—what's your next move?
By April 2, 2025, these sudden hikes translated into an average 18% cost jump for major supplement brands Crescent Edge Consulting.
Why Dietary Supplement Companies Must Act Before 2025 Tariff Hikes
The tariff landscape shifted dramatically in April 2025. The U.S. government implemented a 10% universal tariff on countries not in reciprocal agreements, plus country-specific rates of 11-50% for nations with "unfair trade practices."
These changes hit supplement companies hard. Some multivitamins saw price increases up to 50% as ingredient costs soared. Companies faced additional warehousing expenses as they stockpiled materials before implementation dates.
But here's the key insight: not all ingredients face tariffs. The USTR exempted several essential ingredients from both global and reciprocal tariffs:
Essential vitamins A, B1, B2, B5, B6, B12, C, E
Folic acid (B9)
Niacin & niacinamide (B3)
CoQ10
Amino acids and minerals (e.g., glutamine, magnesium)
Choline
Don't overlook the persistent 25% Section 301 tariff on Chinese-origin supplements (exclusions extended through August 31, 2025) GHY Law.
Companies that moved quickly gained competitive advantages. They secured exempt ingredients, diversified suppliers, and implemented cost-mitigation strategies while competitors scrambled to react.
Map Your Tariff Exposure: Audit Your Ingredients and Products
Start with a complete ingredient audit:
List raw materials + origin
Identify HS codes (use USITC + TariffNumber)
Calculate current/future tariff scenarios
Key HS codes for supplements include HS Code 2936 for food supplements like vitamins, and HS Code 293629 for other vitamins and derivatives. For 8-digit breakdowns use TariffNumber.com or the USITC HTS search. The U.S. International Trade Commission provides HTS lookup tools to help you classify products correctly.
Calculate your current tariff exposure by multiplying ingredient volumes by applicable tariff rates. Then model different scenarios: What if tariffs increase by 10%? 25%? What if your primary supplier becomes unavailable?
This audit reveals your vulnerability. These insights drive your mitigation strategy.
Diversify Sourcing and Manufacturing to Mitigate Risk
Single-source suppliers create single points of failure. Diversification spreads risk and gives you negotiating power.
Research suppliers in low-tariff jurisdictions. Mexico offers significant advantages under USMCA, with many tariffs eliminated and export-oriented manufacturing fostered. Canada also builds its reputation as a manufacturing hub with extensive free trade agreements.
Consider nearshoring finished product manufacturing. Moving production closer to your market reduces transportation costs, shortens lead times, and often avoids tariffs entirely.
Build flexibility into supplier contracts. Include volume commitments that allow you to shift orders between suppliers based on tariff changes. Add price reopener clauses that let you renegotiate terms when tariffs affect costs by more than a specified percentage.
Leverage Tariff-Mitigation Strategies and Trade Remedies
Tariff engineering offers legal ways to reduce duties through product modifications. Follow the six General Rules of Interpretation when reclassifying goods Globalior. Small changes in formulation, packaging, or construction can shift products into different HS classifications with lower tariff rates.
This strategy requires careful compliance with classification rules. Work with trade attorneys to modify products legally while maintaining their effectiveness and marketability.
Duty drawback programs provide another avenue for savings. These programs refund up to 99% of duties, taxes, and fees on imported merchandise that's subsequently exported, destroyed, or used in manufacturing exported products.
Section 301 tariff exclusions remain available for specific products. The USTR extended 164 product exclusions through August 31, 2025, with ongoing reviews for additional extensions.
Monitor exclusion opportunities and submit requests when your products qualify. The process requires detailed documentation, but successful exclusions can save substantial costs.
Tap Government Programs and Industry Advocacy
Government programs support supply chain resilience. The Defense Production Act Title III partners with private industry to mitigate supply chain gaps using grants, purchase commitments, loans, or loan guarantees.
The USDA's Resilient Food Systems Infrastructure Program awarded over $270 million to build food supply chain resilience. Their Food Supply Chain Guaranteed Loan Program provides financial support for processing, manufacturing, storage, and distribution activities.
Industry associations amplify your voice in policy discussions. The Natural Products Association advocates for fair trade policies and tariff relief. The Council for Responsible Nutrition spent $340,000 on lobbying in 2024 to protect industry interests.
Join these associations and participate in their advocacy efforts. Collective action carries more weight than individual company requests.
Communicate Changes and Maintain Customer Trust
Transparency builds trust during difficult transitions. Frame price adjustments as industry-wide realities, not company-specific decisions. Share data about tariff impacts and your mitigation efforts.
Educate distributors and retailers about the challenges you face. Provide talking points they can use with their customers. Show them how your proactive strategies protect their interests too.
Strengthen brand loyalty through value messaging. Emphasize product quality, safety standards, and supply chain reliability. Customers pay more willingly when they understand the value they receive.
Document your compliance efforts and cost-saving initiatives. This information supports price increase justifications and demonstrates your commitment to managing costs responsibly.
Next Steps: Turning Strategy into Savings
Getting ahead of tariffs requires systematic action. Conduct quarterly tariff audits to track changes and identify new opportunities. Engage trade compliance experts who understand the complex regulations and can guide your strategy.
Build relationships with multiple suppliers in different jurisdictions. Invest in contract flexibility and supply chain diversification. Monitor government programs and industry advocacy efforts.
Start your tariff audit today. Map your exposure, identify alternatives, and implement mitigation strategies before the next wave of changes hits your industry.
Download our free Tariff Exposure Checklist to jump-start your audit: Tariff Exposure Checklist.
Download the free Tariff Exposure Checklist and secure your spot on our 14-business-day wait list—protect your margins before the next tariff wave.
