Trump’s tariffs give Canadian, Mexican chocolate makers a competitive edge
President Donald Trump’s tariffs on cocoa imports are driving up costs for U.S. chocolate makers, making Canadian and Mexican competitors more competitive in the $25-30 billion U.S. chocolate market.
Under the USMCA trade agreement, Canada and Mexico can export chocolate to the U.S. tariff-free regardless of where they source cocoa. In contrast, U.S. factories now face 10-25% tariffs on imported cocoa, which could rise to 35% on August 1. Cocoa – which cannot be grown domestically – accounts for 30-50% of a chocolate bar’s cost, News.Az reports, citing Reuters.
Major producers like Hershey (HSY.N) say tariffs could cost the company $100 million in the second half of the year. Smaller firms such as Taza Chocolate in Massachusetts have been hit particularly hard, paying tens of thousands of dollars in duties.
“For a company our size, that’s our profit margin gone,” said Taza founder Alex Whitmore, adding that price hikes are likely.
Customs data shows Canadian chocolate exports to the U.S. jumped 10% in the first five months of 2025, with multinational contractors like Barry Callebaut benefiting from production in Canada and Mexico.
Industry sources say the tariffs are already reshaping supply chains. Mexican and Canadian manufacturers are receiving increased requests from U.S. companies to produce chocolate under contract.
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